81 FR 31637 - American Air Liquide Holdings, Inc.; Analysis To Aid Public Comment
FEDERAL TRADE COMMISSION Federal Register Volume 81, Issue 97 (May 19, 2016)
Federal Register Volume 81, Issue 97 (May 19, 2016)
| Page Range | 31637-31641 | |
| FR Document | 2016-11763 |
[Federal Register Volume 81, Number 97 (Thursday, May 19, 2016)] [Notices] [Pages 31637-31641] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-11763] ======================================================================= ----------------------------------------------------------------------- FEDERAL TRADE COMMISSION [File No. 161 0045] American Air Liquide Holdings, Inc.; Analysis To Aid Public Comment AGENCY: Federal Trade Commission. ACTION: Proposed consent agreement. ----------------------------------------------------------------------- SUMMARY: The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders-- embodied in the consent agreement--that would settle these allegations. DATES: Comments must be received on or before June 14, 2016. ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/airliquideairgasconsent online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write ``In the Matter of American Air Liquide Holdings, Inc.,--Consent Agreement; File No. 161- 0045'' on your comment and file your comment online at https://ftcpublic.commentworks.com/ftc/airliquideairgasconsent by following the instructions on the web-based form. If you prefer to file your comment on paper, write ``In the Matter of American Air Liquide Holdings, Inc.,--Consent Agreement; File No. 161-0045'' on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. FOR FURTHER INFORMATION CONTACT: Christine Tasso (202-326-2232), Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580. SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent orders to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for May 13, 2016), on the World Wide Web, at http://www.ftc.gov/os/actions.shtm. You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before June 14, 2016. Write ``In the Matter of American Air Liquide Holdings, Inc.,--Consent Agreement; File No. 161-0045'' on your comment. Your comment--including your name and your state--will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to remove individuals' home contact information from comments before placing them on the Commission Web site. Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include [[Page 31638]] any ``[t]rade secret or any commercial or financial information which . . . is privileged or confidential,'' as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names. If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept confidential only if the FTC General Counsel, in his or her sole discretion, grants your request in accordance with the law and the public interest. --------------------------------------------------------------------------- \1\ In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c), 16 CFR 4.9(c). --------------------------------------------------------------------------- Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at https://ftcpublic.commentworks.com/ftc/airliquideairgasconsent by following the instructions on the web- based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site. If you file your comment on paper, write ``In the Matter of American Air Liquide Holdings, Inc.,--Consent Agreement; File No. 161- 0045'' on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If possible, submit your paper comment to the Commission by courier or overnight service. Visit the Commission Web site at http://www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before June 14, 2016. You can find more information, including routine uses permitted by the Privacy Act, in the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm. Analysis of Agreement Containing Consent Orders To Aid Public Comment I. Introduction The Federal Trade Commission (``Commission'') has accepted, subject to final approval, an Agreement Containing Consent Orders (``Consent Agreement'') designed to remedy the anticompetitive effects resulting from the proposed acquisition of Airgas, Inc. (``Airgas'') by American Air Liquide Holdings, Inc. (``Air Liquide''). Pursuant to the Consent Agreement, Air Liquide will divest sixteen air separation units (``ASUs''), four vertically integrated dry ice and liquid carbon dioxide plants, two separate liquid carbon dioxide plants, two nitrous oxide plants, and three retail packaged welding gas and hardgoods stores. Air Liquide has agreed to divest the required facilities to one or more Commission-approved buyers within four months of consummating its transaction with Airgas. The divestiture of these facilities and related assets will preserve the competition between Air Liquide and Airgas that the proposed acquisition would otherwise eliminate. The proposed Consent Agreement has been placed on the public record for thirty days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty days, the Commission will again review the proposed Consent Agreement and the comments received, and will decide whether it should withdraw from the proposed Consent Agreement, modify it, or make final the accompanying Decision and Order (``Order''). II. The Transaction Pursuant to an Agreement and Plan of Merger dated November 17, 2015, a wholly owned subsidiary of Air Liquide will merge with and into Airgas in a transaction valued at approximately $13.4 billion. The Commission's Complaint alleges that the proposed acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, by substantially lessening competition in various geographic markets for bulk oxygen, bulk nitrogen, bulk argon, bulk nitrous oxide, bulk liquid carbon dioxide, dry ice, and retail packaged welding gases. III. The Parties Air Liquide is an international company specializing in industrial gases and related services. Air Liquide is the fourth-largest atmospheric gas producer in the United States, operating forty-nine liquid ASUs spread throughout the country. In the United States, Air Liquide also operates two nitrous oxide production facilities and eleven liquid carbon dioxide production facilities, six of which also produce dry ice. Air Liquide has largely exited its retail packaged gas and hardgoods business in the United States, but still operates five branch locations in Alaska. In 2015, Air Liquide's revenue totaled [euro]16.4 billion, with [euro]3.9 billion coming from the United States. Airgas, headquartered in Radnor, Pennsylvania, is the leading U.S. distributor of packaged industrial, medical, and specialty gases and hardgoods, such as welding equipment and supplies. Airgas is the fifth- largest atmospheric gas producer in the United States, operating seventeen liquid ASUs, most of which are concentrated in the eastern half of the country. Airgas also operates a number of other industrial gas production plants, including three nitrous oxide production facilities, eleven liquid carbon dioxide production facilities, and fourteen dry ice production facilities. Airgas operates a network of approximately nine hundred retail branches where it sells hardgoods and packaged gas. For the fiscal year ending March 31, 2015, Airgas's consolidated net sales were approximately $5.3 billion, with over 98% of those revenues coming from the United States. IV. The Relevant Markets for Bulk Oxygen, Bulk Nitrogen, and Bulk Argon Atmospheric gases are gases that are present in the Earth's atmosphere. Industrial gas suppliers like Airgas and Air Liquide produce atmospheric gases for use in a wide range of applications, including oil and gas, steelmaking, health care, and food manufacturing. Liquid oxygen, nitrogen, and argon are three of the most widely used atmospheric industrial gases, and each has specific properties that make it uniquely suited for the applications for which it is used. For most of these applications, there is no substitute for the use of oxygen, nitrogen, or argon. Atmospheric gases are distributed to customers in different forms and methods depending on the volume of gas the customer requires. Customers who require large volumes are supplied either by on-site ASUs that are located at the customer's facility or by a [[Page 31639]] pipeline connecting a plant to that customer. Bulk customers are those who have significant volume requirements, but are not large enough to justify on-site or pipeline gas delivery. Bulk customers typically are supplied with bulk oxygen, bulk nitrogen, or bulk argon in cryogenic trailers carrying the gas in liquid form. The liquid form is more condensed than the gaseous form and therefore easier to transport and store in large quantities. The bulk liquid gases are then stored in tanks located at the customer site. From there, customers can either use the product in its liquid form or convert it back to gas. Small- volume customers purchase nitrogen, oxygen, or argon in cylinders containing the product in gaseous form. These smaller customers are usually served by distributors, who receive their product from industrial gas suppliers in bulk liquid form. It is not feasible for bulk oxygen, bulk nitrogen, or bulk argon customers to switch distribution methods because their demand is too great for cylinder delivery and too small for on-site, or pipeline delivery. For atmospheric gases, the ratio of the product's value to its transportation costs largely determines the relevant geographic market. Due to the relatively low sales price of bulk oxygen and nitrogen and the significant freight costs associated with transporting them, these gases can generally only be shipped economically a maximum distance of approximately 100 to 250 miles from the ASU that produces the gas. Therefore, it is appropriate to analyze the competitive effects of the proposed acquisition in regional geographic markets for bulk oxygen and bulk nitrogen. The relevant geographic markets in which to analyze the effects of the proposed acquisition are: (1) The Northeast; (2) the Mid-Atlantic; (3) the Southeast; (4) Atlanta and surrounding areas; (5) Arkansas and surrounding areas; (6) Oklahoma and surrounding areas; (7) Western Kentucky and surrounding areas; (8) Chicago, Milwaukee, and surrounding areas; (9) Western Ohio and surrounding areas; and (10) Pittsburgh, Cleveland, and surrounding areas. Because bulk argon is a rarer and more expensive product than bulk oxygen and bulk nitrogen, it may be economically transported over greater distances. Therefore, the relevant geographic area in which to analyze the effects of the proposed acquisition on the bulk argon market is the United States. The proposed acquisition would harm competition in the relevant markets for bulk oxygen and bulk nitrogen. Each market includes areas in which both Air Liquide and Airgas have plants that are particularly well situated to economically serve a large set of customers. The proposed acquisition would eliminate an important source of competition for those customers, would increase concentration in the relevant markets, and would cause prices to rise. For bulk argon, there are six significant suppliers in the United States, the largest of which is Air Liquide. The proposed acquisition would substantially increase concentration in bulk argon, creating a highly concentrated market. V. The Relevant Market for Bulk Nitrous Oxide Nitrous oxide is a clear, odorless gas that is produced by heating and purifying ammonium nitrate. Commonly known as ``laughing gas,'' nitrous oxide is mainly used by dentists as an analgesic or a weak anesthetic. Other uses for nitrous oxide include augmenting combustion in automotive products, oxidizing rocket fuel, and manufacturing whipped cream and semiconductors. Customers who purchase nitrous oxide in bulk form are typically distributors who repackage the gas in smaller quantities. Most sales for end-use are made in cylinders to dental offices. Because of the unique properties of nitrous oxide, other gases are not considered substitutes. Consequently, customers would not switch to another gas or product even if the price of bulk nitrous oxide increased by five to ten percent. Currently only five nitrous oxide production facilities service the entire United States and Canada. Bulk nitrous oxide is typically transported in tanker trucks. When purchasing bulk nitrous oxide, customers are not concerned with finding the closest production facility when choosing a supplier. Therefore, the relevant geographic area in which to analyze the effects of the proposed acquisition on the bulk nitrous oxide market is the United States and Canada. Air Liquide and Airgas are the only two producers of nitrous oxide in the United States and Canada. Airgas is the largest producer of nitrous oxide in North America and maintains three separate facilities located Cantonment, Florida, Yazoo City, Mississippi, and Maitland, Ontario. Air Liquide operates two North American nitrous oxide plants in Donora, Pennsylvania and Richmond, California. The proposed acquisition would produce a monopoly in the market for bulk nitrous oxide. VI. The Relevant Markets for Bulk Liquid Carbon Dioxide Carbon dioxide is a ``process gas,'' meaning that it is captured as a by-product of other manufacturing processes, such as ethanol, ammonia, and hydrogen. It is also captured from natural sources such as natural gas wells. The carbon dioxide is then put in liquid form through a cryogenic process in plants typically located adjacent to carbon dioxide gas sources. The most common application for liquid carbon dioxide is food and beverage production, where it is used to carbonate beverages, chill and freeze food, and stun animals before they are slaughtered. For the vast majority of applications, there are no viable substitutes for liquid carbon dioxide. Suppliers deliver liquid carbon dioxide to customers in bulk trailers or rail cars. Most customers store liquid carbon dioxide in tanks located at their manufacturing facilities until it is used. Customers would not switch to micro-bulk or cylinder delivery because bulk delivery is far cheaper and they would have to contend with managing significantly more deliveries to meet their needs. In addition, customers would not consider self-sourcing liquid carbon dioxide unless the cost increased significantly more than ten percent because extracting carbon dioxide requires expensive infrastructure and the supply of carbon dioxide is shrinking. Significant freight costs associated with transporting liquid carbon dioxide relative to its sales price make it economical to ship liquid carbon dioxide no more than 250 miles by truck. In areas with few or no carbon dioxide sources, liquid carbon dioxide is shipped as much as 750 miles by rail. Therefore, it is appropriate to analyze the competitive effects of the proposed acquisition in regional geographic markets for bulk liquid carbon dioxide. For bulk liquid carbon dioxide, the relevant geographic markets in which to analyze the effects of the proposed acquisition are: (1) Indiana, Kentucky, and surrounding areas; (2) Mississippi and surrounding areas; and (3) the Texas Panhandle and surrounding areas. Two of the three relevant markets for bulk liquid carbon dioxide are highly concentrated and the proposed acquisition would substantially increase concentration. While the Indiana, Kentucky and surrounding areas market is moderately concentrated, the proposed acquisition would produce a significant increase in concentration and would leave the combined entity as the leading supplier. In addition, for some customers in that region, the merging firms are the closest competitors. [[Page 31640]] VII. The Relevant Markets for Dry Ice In the United States, both parties produce and sell dry ice. Dry ice is the solid form of carbon dioxide, and a significant portion of the carbon dioxide market. It is produced when liquid carbon dioxide is injected into an atmospheric chamber, which causes some of the liquid carbon dioxide to vaporize into a gas, while reducing the temperature of the remaining liquid. The remaining liquid solidifies into a snow- like consistency. This snow is then collected and pressed into dry ice blocks or pellets, and distributed to customers in standard or bulk pellet bags, or in blocks, slices, or sticks. Dry ice has many applications, including shipping of frozen food and medical supplies, cooling of materials during production, and industrial blast cleaning. It is used in a variety of industries such as food processing, transportation, and biotechnology. Suppliers of dry ice either sell directly to end users, or wholesale to distributors or resellers. For the vast majority of applications, there are no viable substitutes for dry ice. Dry ice begins to dissipate as soon as it is produced. As a result, dry ice is not typically transported more than 150 miles to a customer, although where local supply is insufficient, customers are willing to have dry ice shipped up to 350 miles. Therefore, it is appropriate to analyze the competitive effects of the proposed acquisition in regional geographic markets for dry ice. The relevant geographic markets in which to analyze the effects of the proposed acquisition are: (1) The San Francisco Bay Area; (2) Iowa and surrounding areas; and (3) the Texas Panhandle and surrounding areas. Air Liquide and Airgas are the only two producers of dry ice in the San Francisco Bay Area. Consequently, the proposed acquisition, without remedy, would lead to Air Liquide holding a monopoly. In the two remaining dry ice markets, the proposed acquisition would substantially decrease competition in an already highly concentrated market, and would leave the combined entity as the leading supplier. VIII. The Relevant Markets for Retail Packaged Welding Gases Air Liquide and Airgas operate retail packaged gas stores in close proximity to each other in Anchorage, Fairbanks, and Kenai, Alaska. Packaged welding gas and hardgoods stores are outlets where customers can purchase cylinders of various gases and related hardgoods used for welding, such as safety gear and other physical goods. While customers may choose to purchase both their packaged welding gases and hardgoods at the same retail location, they are also willing to purchase packaged welding gas from one store and hardgoods from another. Customers cannot turn to alternatives for their packaged welding gases, such as bulk delivery from ASUs or filling their own cylinders because their purchasing volumes are too low to justify large quantity purchases. Additionally, for the vast majority of applications, there are no viable substitutes for packaged welding gases. Generally, purchasers of packaged welding gases travel approximately twenty-five miles to make purchases at retail outlets. Even in Alaska, where there are fewer retail stores and customers may be willing to travel further, it is unlikely that customers would travel over fifty miles to a retail location to purchase packaged welding gases. Therefore, it is appropriate to analyze the competitive effects of the proposed acquisition in local geographic markets for retail packaged welding gas. Accordingly, the relevant geographic markets at issue in this case are the local areas of: (1) Anchorage, Alaska; (2) Fairbanks, Alaska; and (3) Kenai, Alaska. The proposed acquisition would reduce the number of competitors from two to one in each of these markets. VIIII. Effects of the Acquisition The proposed acquisition would eliminate direct and substantial competition between Air Liquide and Airgas in each of the relevant markets, provide Air Liquide with a larger base of sales on which to enjoy the benefit of a unilateral price increase, and eliminate a competitor to which customers otherwise could have diverted their sales in markets where alternative sources of supply are limited. The proposed acquisition, therefore, likely would allow Air Liquide to exercise market power unilaterally, increasing the likelihood that purchasers of bulk oxygen, bulk nitrogen, bulk argon, bulk nitrous oxide, bulk liquid carbon dioxide, dry ice, or retail packaged welding gas would be forced to pay higher prices in the relevant areas. The proposed acquisition would also enhance the likelihood of collusion or coordinated action between or among the remaining firms in the relevant markets for bulk oxygen, bulk nitrogen, bulk argon, bulk liquid carbon dioxide, and dry ice because a significant competitor would be eliminated, and only a small number of viable competitors would remain. In addition, certain conditions prevalent in these relevant markets, including the relative homogeneity of the firms and products involved and availability of detailed market information, are conducive to collusion or coordinated action. X. Entry New entry into the relevant markets would not occur in a timely manner sufficient to deter or counteract the likely adverse competitive effects of the proposed acquisition. Entry into the bulk oxygen, nitrogen, and argon markets is costly, difficult, and unlikely because of, among other things, the time and cost required to construct the ASUs that produce these products. Constructing an ASU at a scale sufficient to be viable in the market would cost at least $30 to $100 million, most of which are sunk costs. Moreover, it is not economically justifiable to build an ASU unless a significant amount of the plant's capacity has been pre-sold prior to construction, either to an on-site customer or to customers with commitments under contract. Such pre-sale opportunities occur infrequently and unpredictably and can take several years to secure. Entry into the bulk nitrous oxide market is costly, difficult, and unlikely because of, among other things, the time and cost required to construct a plant capable of producing nitrous oxide. Constructing such a plant would cost at least $5 to $10 million, and the demand for nitrous oxide is generally insufficient to justify the investment in building a nitrous oxide plant. In addition, there are regulatory barriers to overcome due to the hazardous nature of producing nitrous oxide. Entry into the bulk liquid carbon dioxide and dry ice markets would also not be timely, likely, or sufficient to deter or counteract the adverse competitive effects of the proposed acquisition. Constructing a plant capable of producing bulk liquid carbon dioxide would cost at least $10 to $30 million. In addition, successful entry into the bulk liquid carbon dioxide market requires access to raw carbon dioxide supply sources, which are typically unavailable due to long-term contracts with incumbent liquid carbon dioxide suppliers. For dry ice production, there are similar entry barriers. Because liquid carbon dioxide is the primary input in dry ice production, the most significant barrier to entering the market for dry ice is obtaining a liquid carbon dioxide source. The entrant would also have to build a dry ice facility, but sales opportunities would likely be too small [[Page 31641]] to justify the sunk costs associated with the required investment. Entry into the retail packaged welding gases market would also not be timely, likely or sufficient to deter or counteract the likely adverse competitive effects of the proposed acquisition. Currently, Air Liquide is the only entity capable of filling packaged gases in the relevant geographic markets for retail packaged welding gas, all of which are in Alaska. A new entrant would be required either to purchase bulk gases and construct a fill plant to put the gases in packaged form or to establish a supply network to transport packaged gases from a fill plant outside of Alaska to the relevant geographic markets. Because of these obstacles, new entry into the relevant markets is unlikely to occur. XI. The Consent Agreement The proposed Consent Agreement is designed to eliminate the competitive concerns raised by Air Liquide's proposed acquisition of Airgas in each relevant market. Under the terms of the proposed Consent Agreement, Air Liquide is required to divest sixteen ASUs, twelve of which are currently owned and operated by Air Liquide and four of which are currently owned and operated by Airgas. The Air Liquide-operated ASUs are located in: (1) Burlington, Wisconsin; (2) Chattanooga, Tennessee; (3) Feura Bush, New York; (4) Holland, Ohio; (5) Mapleton, Illinois; (6) Middletown, Ohio; (7) Mount Vernon, Indiana; (8) Pittsboro, Indiana; (9) St. Marys, Pennsylvania; (10) Spartanburg, South Carolina; (11) Wake Forest, North Carolina; and (12) West Point, Virginia. The Airgas-operated ASUs are located in: (1) Carrollton, Kentucky; (2) Gaston, South Carolina; (3) Lawton, Oklahoma; and (4) Mulberry, Arkansas. Air Liquide is also required to divest both of its nitrous oxide plants, one located in Denora, Pennsylvania and the other in Richmond, California. Air Liquide must also divest four co-located liquid carbon dioxide and dry ice facilities, which comprise its entire dry ice business, located in: (1) Borger, Texas; (2) Galva, Iowa; (3) Sioux City, Iowa; (4) and Martinez, California. Additionally, Air Liquide will divest two liquid carbon dioxide- only facilities in Madison, Mississippi and Washington, Indiana along with the associated rail depot located in Fort Meade, Florida. Lastly, Air Liquide will divest Airgas's retail packaged welding gas and hardgoods stores located in Anchorage, Fairbanks, and Kenai, Alaska. Additionally, with regard to the ASU assets, although the anticompetitive effects of Air Liquide's acquisition of Airgas are related to the bulk liquid oxygen, nitrogen, and argon markets, the pipeline oxygen and nitrogen businesses and contracts located at the ASUs are also being divested because they are critical to the viability, efficiency, and competitiveness of each plant. Air Liquide has agreed to divest the required facilities, together with all related equipment, customer and supply contracts, technology, and goodwill, to one or more Commission-approved buyers within four months of consummating its transaction with Airgas. Any acquirer of the divested assets must receive the prior approval of the Commission. The Commission's goal in evaluating possible purchasers of divested assets is to maintain the competitive environment that existed prior to the acquisition. A proposed acquirer of divested assets must not itself present competitive problems. There are a number of parties interested in purchasing the assets to be divested that have the expertise, experience, and financial viability to successfully purchase and manage these assets and retain the current level of competition in the relevant markets. The Commission is therefore satisfied that sufficient potential buyers for the divested assets in each relevant market currently exist. The proposed Consent Agreement incorporates a proposed Order to Maintain Assets to ensure the continued operations of the divestiture assets while a sale is conducted, and for a brief transition period once the Commission approves a buyer for the assets. The proposed Order to Maintain Assets also allows the Commission to appoint an interim monitor to oversee compliance with all the obligations and responsibilities under the proposed Order and requires Air Liquide to execute an agreement conferring upon the interim monitor all of the rights, powers, and authorities necessary to permit the monitor to ensure the continued health and competitiveness of the divested businesses. The purpose of this analysis is to facilitate public comment on the proposed Consent Agreement, and it is not intended to constitute an official interpretation of the proposed Consent Agreement or to modify its terms in any way. By direction of the Commission. Donald S. Clark, Secretary. [FR Doc. 2016-11763 Filed 5-18-16; 8:45 am] BILLING CODE 6750-01-P
![Federal Register / Vol. 81, No. 97 / Thursday, May 19, 2016 / Notices 31637
Reserve is authorized to use the FR 3067 supervisory, regulatory, fiscal, and Federal Trade Commission, Office of the
by sections 2A and 12A of the FRA. operational responsibilities. The Federal Secretary, 600 Pennsylvania Avenue
Additionally, depending on the Reserve may conduct various versions NW., Suite CC–5610 (Annex D),
survey respondent, the information of the survey, as needed, and may Washington, DC 20580, or deliver your
collection may be authorized under a survey respondents up to four times per comment to the following address:
more specific statute. These statutes are: year. The frequency and content of the Federal Trade Commission, Office of the
• Expedited Funds Availability Act questions depends on changing Secretary, Constitution Center, 400 7th
section 609 (12 U.S.C. 4008) economic, regulatory, supervisory, or Street SW., 5th Floor, Suite 5610
• Electronic Fund Transfer Act legislative developments. (Annex D), Washington, DC 20024.
section 920 (15 U.S.C. 1693o–2) Current Actions: The Federal Reserve FOR FURTHER INFORMATION CONTACT:
• The Check Clearing for the 21st proposes to add federal, state, and local Christine Tasso (202–326–2232), Bureau
Century Act section 15 (12 U.S.C. 5014) government agencies as potential
• Federal Reserve Act section 11 of Competition, 600 Pennsylvania
respondents to a survey. The Federal Avenue NW., Washington, DC 20580.
(Examinations and reports, Supervision Reserve also proposes adjusting the
over Reserve Banks, and Federal SUPPLEMENTARY INFORMATION: Pursuant
burden by decreasing the estimated to Section 6(f) of the Federal Trade
Reserve Note provisions, 12 U.S.C. 248); number of responses per year from four
section 11A (Pricing of Services, 12 Commission Act, 15 U.S.C. 46(f), and
to two; decreasing the hours per FTC Rule 2.34, 16 CFR 2.34, notice is
U.S.C. 248a); section 13 (FRB deposits response from 3 to 1.5; and by
and collections, 12 U.S.C. 342); and hereby given that the above-captioned
increasing the estimated number of consent agreement containing consent
section 16 (Issuance of Federal Reserve respondents from 5,000 to 10,000.
notes, par clearance, and FRB orders to cease and desist, having been
clearinghouse, 12 U.S.C. 248–1, 360, Board of Governors of the Federal Reserve filed with and accepted, subject to final
and 411). System, May 12, 2016. approval, by the Commission, has been
Under the appropriate authority, the Michael Lewandowski, placed on the public record for a period
Federal Reserve may make submission Associate Secretary of the Board. of thirty (30) days. The following
of survey information mandatory for [FR Doc. 2016–11781 Filed 5–18–16; 8:45 am] Analysis to Aid Public Comment
entities such as financial institutions or BILLING CODE 6210–01–P describes the terms of the consent
payment card networks; submissions agreement, and the allegations in the
would otherwise be voluntary. complaint. An electronic copy of the
The ability of the Federal Reserve to FEDERAL TRADE COMMISSION full text of the consent agreement
maintain the confidentiality of package can be obtained from the FTC
information provided by respondents to [File No. 161 0045] Home Page (for May 13, 2016), on the
the FR 3067 surveys will be determined American Air Liquide Holdings, Inc.; World Wide Web, at http://www.ftc.gov/
on a case-by-case basis depending on Analysis To Aid Public Comment os/actions.shtm.
the type of information provided for a You can file a comment online or on
particular survey. For instance, in some AGENCY: Federal Trade Commission. paper. For the Commission to consider
circumstances, no issue of ACTION: Proposed consent agreement. your comment, we must receive it on or
confidentiality will arise as the surveys before June 14, 2016. Write ‘‘In the
may be conducted by private firms SUMMARY: The consent agreement in this Matter of American Air Liquide
under contract with the Federal Reserve matter settles alleged violations of Holdings, Inc.,—Consent Agreement;
and names or other directly identifying federal law prohibiting unfair methods File No. 161–0045’’ on your comment.
information would not be provided to of competition. The attached Analysis to Your comment—including your name
the Federal Reserve. In circumstances Aid Public Comment describes both the and your state—will be placed on the
where identifying information is allegations in the complaint and the public record of this proceeding,
provided to the Federal Reserve, such terms of the consent orders—embodied including, to the extent practicable, on
information could possibly be protected in the consent agreement—that would the public Commission Web site, at
under the Freedom of Information Act settle these allegations. http://www.ftc.gov/os/public
(FOIA), exemptions 4 and 6. If the DATES: Comments must be received on comments.shtm. As a matter of
survey is mandatory and is undertaken or before June 14, 2016. discretion, the Commission tries to
as part of the supervisory process, ADDRESSES: Interested parties may file a remove individuals’ home contact
information could be protected under comment at https://ftcpublic.comment information from comments before
FOIA exemption 8, which protects works.com/ftc/airliquideairgasconsent placing them on the Commission Web
information relating to the examination online or on paper, by following the site.
reports (5 U.S.C. 552(b)(8)). instructions in the Request for Comment Because your comment will be made
Abstract: This survey collects part of the SUPPLEMENTARY INFORMATION public, you are solely responsible for
information, as needed, on specific and section below. Write ‘‘In the Matter of making sure that your comment does
time sensitive issues, which may affect American Air Liquide Holdings, Inc.,— not include any sensitive personal
the Federal Reserve’s decision making. Consent Agreement; File No. 161–0045’’ information, like anyone’s Social
Respondents may comprise depository on your comment and file your Security number, date of birth, driver’s
institutions, financial and nonfinancial comment online at https://ftcpublic. license number or other state
businesses and related entities, commentworks.com/ftc/airliquideairgas identification number or foreign country
individual consumers, households, and consent by following the instructions on equivalent, passport number, financial
mstockstill on DSK3G9T082PROD with NOTICES
federal, state and local government the web-based form. If you prefer to file account number, or credit or debit card
agencies. This survey may be mandatory your comment on paper, write ‘‘In the number. You are also solely responsible
for a certain subset of entities and Matter of American Air Liquide for making sure that your comment does
voluntary for all other respondents. The Holdings, Inc.,—Consent Agreement; not include any sensitive health
Federal Reserve uses this event-driven File No. 161–0045’’ on your comment information, like medical records or
survey to obtain information specifically and on the envelope, and mail your other individually identifiable health
tailored to the Federal Reserve System’s comment to the following address: information. In addition, do not include
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![31638 Federal Register / Vol. 81, No. 97 / Thursday, May 19, 2016 / Notices
any ‘‘[t]rade secret or any commercial or public comments that it receives on or III. The Parties
financial information which . . . is before June 14, 2016. You can find more Air Liquide is an international
privileged or confidential,’’ as discussed information, including routine uses company specializing in industrial gases
in Section 6(f) of the FTC Act, 15 U.S.C. permitted by the Privacy Act, in the and related services. Air Liquide is the
46(f), and FTC Rule 4.10(a)(2), 16 CFR Commission’s privacy policy, at http:// fourth-largest atmospheric gas producer
4.10(a)(2). In particular, do not include www.ftc.gov/ftc/privacy.htm. in the United States, operating forty-
competitively sensitive information nine liquid ASUs spread throughout the
such as costs, sales statistics, Analysis of Agreement Containing
Consent Orders To Aid Public Comment country. In the United States, Air
inventories, formulas, patterns, devices, Liquide also operates two nitrous oxide
manufacturing processes, or customer I. Introduction
production facilities and eleven liquid
names. The Federal Trade Commission carbon dioxide production facilities, six
If you want the Commission to give
(‘‘Commission’’) has accepted, subject to of which also produce dry ice. Air
your comment confidential treatment,
final approval, an Agreement Liquide has largely exited its retail
you must file it in paper form, with a
Containing Consent Orders (‘‘Consent packaged gas and hardgoods business in
request for confidential treatment, and
Agreement’’) designed to remedy the the United States, but still operates five
you have to follow the procedure
anticompetitive effects resulting from branch locations in Alaska. In 2015, Air
explained in FTC Rule 4.9(c), 16 CFR
the proposed acquisition of Airgas, Inc. Liquide’s revenue totaled Ö16.4 billion,
4.9(c).1 Your comment will be kept
(‘‘Airgas’’) by American Air Liquide with Ö3.9 billion coming from the
confidential only if the FTC General
Counsel, in his or her sole discretion, Holdings, Inc. (‘‘Air Liquide’’). Pursuant United States.
grants your request in accordance with to the Consent Agreement, Air Liquide Airgas, headquartered in Radnor,
the law and the public interest. will divest sixteen air separation units Pennsylvania, is the leading U.S.
Postal mail addressed to the (‘‘ASUs’’), four vertically integrated dry distributor of packaged industrial,
Commission is subject to delay due to ice and liquid carbon dioxide plants, medical, and specialty gases and
heightened security screening. As a two separate liquid carbon dioxide hardgoods, such as welding equipment
result, we encourage you to submit your plants, two nitrous oxide plants, and and supplies. Airgas is the fifth-largest
comments online. To make sure that the three retail packaged welding gas and atmospheric gas producer in the United
Commission considers your online hardgoods stores. Air Liquide has States, operating seventeen liquid ASUs,
comment, you must file it at https:// agreed to divest the required facilities to most of which are concentrated in the
ftcpublic.commentworks.com/ftc/ one or more Commission-approved eastern half of the country. Airgas also
airliquideairgasconsent by following the buyers within four months of operates a number of other industrial
instructions on the web-based form. If consummating its transaction with gas production plants, including three
this Notice appears at http:// Airgas. The divestiture of these facilities nitrous oxide production facilities,
www.regulations.gov/#!home, you also and related assets will preserve the eleven liquid carbon dioxide production
may file a comment through that Web competition between Air Liquide and facilities, and fourteen dry ice
site. Airgas that the proposed acquisition production facilities. Airgas operates a
If you file your comment on paper, would otherwise eliminate. network of approximately nine hundred
write ‘‘In the Matter of American Air The proposed Consent Agreement has retail branches where it sells hardgoods
Liquide Holdings, Inc.,—Consent been placed on the public record for and packaged gas. For the fiscal year
Agreement; File No. 161–0045’’ on your thirty days for receipt of comments by ending March 31, 2015, Airgas’s
comment and on the envelope, and mail interested persons. Comments received consolidated net sales were
your comment to the following address: during this period will become part of approximately $5.3 billion, with over
Federal Trade Commission, Office of the the public record. After thirty days, the 98% of those revenues coming from the
Secretary, 600 Pennsylvania Avenue Commission will again review the United States.
NW., Suite CC–5610 (Annex D), proposed Consent Agreement and the
IV. The Relevant Markets for Bulk
Washington, DC 20580, or deliver your comments received, and will decide
Oxygen, Bulk Nitrogen, and Bulk Argon
comment to the following address: whether it should withdraw from the
Federal Trade Commission, Office of the proposed Consent Agreement, modify it, Atmospheric gases are gases that are
Secretary, Constitution Center, 400 7th or make final the accompanying present in the Earth’s atmosphere.
Street SW., 5th Floor, Suite 5610 Decision and Order (‘‘Order’’). Industrial gas suppliers like Airgas and
(Annex D), Washington, DC 20024. If Air Liquide produce atmospheric gases
II. The Transaction for use in a wide range of applications,
possible, submit your paper comment to
the Commission by courier or overnight Pursuant to an Agreement and Plan of including oil and gas, steelmaking,
service. Merger dated November 17, 2015, a health care, and food manufacturing.
Visit the Commission Web site at wholly owned subsidiary of Air Liquide Liquid oxygen, nitrogen, and argon are
http://www.ftc.gov to read this Notice will merge with and into Airgas in a three of the most widely used
and the news release describing it. The transaction valued at approximately atmospheric industrial gases, and each
FTC Act and other laws that the $13.4 billion. The Commission’s has specific properties that make it
Commission administers permit the Complaint alleges that the proposed uniquely suited for the applications for
collection of public comments to acquisition, if consummated, would which it is used. For most of these
consider and use in this proceeding as violate Section 7 of the Clayton Act, as applications, there is no substitute for
appropriate. The Commission will amended, 15 U.S.C. 18, and Section 5 of the use of oxygen, nitrogen, or argon.
mstockstill on DSK3G9T082PROD with NOTICES
consider all timely and responsive the Federal Trade Commission Act, as Atmospheric gases are distributed to
amended, 15 U.S.C. 45, by substantially customers in different forms and
1 In particular, the written request for confidential lessening competition in various methods depending on the volume of
treatment that accompanies the comment must geographic markets for bulk oxygen, gas the customer requires. Customers
include the factual and legal basis for the request,
and must identify the specific portions of the
bulk nitrogen, bulk argon, bulk nitrous who require large volumes are supplied
comment to be withheld from the public record. See oxide, bulk liquid carbon dioxide, dry either by on-site ASUs that are located
FTC Rule 4.9(c), 16 CFR 4.9(c). ice, and retail packaged welding gases. at the customer’s facility or by a
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![Federal Register / Vol. 81, No. 97 / Thursday, May 19, 2016 / Notices 31641
to justify the sunk costs associated with acquisition of Airgas are related to the DEPARTMENT OF HEALTH AND
the required investment. bulk liquid oxygen, nitrogen, and argon HUMAN SERVICES
Entry into the retail packaged welding markets, the pipeline oxygen and
gases market would also not be timely, nitrogen businesses and contracts Administration for Children and
likely or sufficient to deter or counteract located at the ASUs are also being Families
the likely adverse competitive effects of divested because they are critical to the
the proposed acquisition. Currently, Air viability, efficiency, and Submission for OMB Review;
Liquide is the only entity capable of competitiveness of each plant. Air Comment Request
filling packaged gases in the relevant Liquide has agreed to divest the Title: Tribal Maternal, Infant, and
geographic markets for retail packaged required facilities, together with all Early Childhood Home Visiting Program
welding gas, all of which are in Alaska. related equipment, customer and supply Implementation Plan Guidance and
A new entrant would be required either contracts, technology, and goodwill, to Form 1: Demographic and Service
to purchase bulk gases and construct a one or more Commission-approved Utilization Data.
fill plant to put the gases in packaged buyers within four months of OMB No.: 0970–0389.
form or to establish a supply network to consummating its transaction with Description: Social Security Act, Title
transport packaged gases from a fill Airgas. V, Section 511 (42 U.S.C. 711), as
plant outside of Alaska to the relevant Any acquirer of the divested assets amended by the Medicare Access and
geographic markets. Because of these must receive the prior approval of the Children’s Health Insurance Program
obstacles, new entry into the relevant Commission. The Commission’s goal in (CHIP) Reauthorization Act of 2015
markets is unlikely to occur. evaluating possible purchasers of (Pub. L. 114–10), created the Maternal,
XI. The Consent Agreement divested assets is to maintain the Infant, and Early Childhood Home
The proposed Consent Agreement is competitive environment that existed Visiting Program (MIECHV) and
designed to eliminate the competitive prior to the acquisition. A proposed authorized the Secretary of HHS (in
concerns raised by Air Liquide’s acquirer of divested assets must not Section 511(h)(2)(A)) to award grants to
proposed acquisition of Airgas in each itself present competitive problems. Indian tribes (or a consortium of Indian
relevant market. Under the terms of the There are a number of parties interested tribes), tribal organizations, or urban
proposed Consent Agreement, Air in purchasing the assets to be divested Indian organizations to conduct an early
Liquide is required to divest sixteen that have the expertise, experience, and childhood home visiting program. The
ASUs, twelve of which are currently financial viability to successfully legislation set aside 3 percent of the
owned and operated by Air Liquide and purchase and manage these assets and total MIECHV program appropriation
four of which are currently owned and retain the current level of competition (authorized in Section 511(j)) for grants
operated by Airgas. The Air Liquide- in the relevant markets. The to tribal entities. Tribal MIECHV grants,
operated ASUs are located in: (1) Commission is therefore satisfied that to the greatest extent practicable, are to
Burlington, Wisconsin; (2) Chattanooga, sufficient potential buyers for the be consistent with the requirements of
Tennessee; (3) Feura Bush, New York; divested assets in each relevant market the MIECHV grants to states and
(4) Holland, Ohio; (5) Mapleton, Illinois; currently exist. jurisdictions (authorized in Section
(6) Middletown, Ohio; (7) Mount The proposed Consent Agreement 511(c)), and include conducting a needs
Vernon, Indiana; (8) Pittsboro, Indiana; incorporates a proposed Order to assessment and establishing
(9) St. Marys, Pennsylvania; (10) Maintain Assets to ensure the continued quantifiable, measurable benchmarks.
Spartanburg, South Carolina; (11) Wake operations of the divestiture assets The Administration for Children and
Forest, North Carolina; and (12) West while a sale is conducted, and for a brief Families, Office of Child Care and Office
Point, Virginia. The Airgas-operated transition period once the Commission of the Deputy Assistant Secretary for
ASUs are located in: (1) Carrollton, approves a buyer for the assets. The Early Childhood Development, in
Kentucky; (2) Gaston, South Carolina; proposed Order to Maintain Assets also collaboration with the Health Resources
(3) Lawton, Oklahoma; and (4) allows the Commission to appoint an and Services Administration, Maternal
Mulberry, Arkansas. Air Liquide is also interim monitor to oversee compliance and Child Health Bureau, awarded
required to divest both of its nitrous with all the obligations and grants for the Tribal MIECHV Program.
oxide plants, one located in Denora, responsibilities under the proposed The Tribal MIECHV grant awards
Pennsylvania and the other in Order and requires Air Liquide to support 5-year cooperative agreements
Richmond, California. Air Liquide must execute an agreement conferring upon to conduct community needs and
also divest four co-located liquid carbon the interim monitor all of the rights, readiness assessments, plan for and
dioxide and dry ice facilities, which powers, and authorities necessary to implement high-quality, culturally-
comprise its entire dry ice business, permit the monitor to ensure the relevant, evidence-based home visiting
located in: (1) Borger, Texas; (2) Galva, continued health and competitiveness programs in at-risk Tribal communities,
Iowa; (3) Sioux City, Iowa; (4) and of the divested businesses. and engage in rigorous evaluation
Martinez, California. The purpose of this analysis is to activities to build the knowledge base
Additionally, Air Liquide will divest facilitate public comment on the on home visiting among American
two liquid carbon dioxide-only facilities proposed Consent Agreement, and it is Indian and Alaska Native populations.
in Madison, Mississippi and not intended to constitute an official In Year 1 of the cooperative
Washington, Indiana along with the interpretation of the proposed Consent agreement, grantees must (1) conduct a
associated rail depot located in Fort comprehensive community needs and
mstockstill on DSK3G9T082PROD with NOTICES
Agreement or to modify its terms in any
Meade, Florida. Lastly, Air Liquide will way. readiness assessment and (2) develop a
divest Airgas’s retail packaged welding plan to respond to identified needs.
gas and hardgoods stores located in By direction of the Commission. Grantees will be required to conduct or
Anchorage, Fairbanks, and Kenai, Donald S. Clark, update a needs and readiness
Alaska. Additionally, with regard to the Secretary. assessment and develop an
ASU assets, although the [FR Doc. 2016–11763 Filed 5–18–16; 8:45 am] implementation plan to respond to
anticompetitive effects of Air Liquide’s BILLING CODE 6750–01–P those needs, including a plan for
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Document Created: 2018-02-07 15:01:46
Document Modified: 2018-02-07 15:01:46
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Proposed consent agreement. | |
| Dates | Comments must be received on or before June 14, 2016. | |
| Contact | Christine Tasso (202-326-2232), Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580. | |
| FR Citation | 81 FR 31637 |
2025 Federal Register | Disclaimer | Privacy Policy
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