152 F.Supp.2d 37 (D.D.C. 2001), C. A. 2000-954, United States v. Alcoa, Inc.

Docket Nº:C. A. 2000-954
Citation:152 F.Supp.2d 37
Party Name:United States v. Alcoa, Inc.
Case Date:July 10, 2001
Court:United States District Courts, District of Columbia
 
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152 F.Supp.2d 37 (D.D.C. 2001)

UNITED STATES of America, Plaintiff,

v.

ALCOA, INC., et al, Defendants.

Civil Action No. 2000-954(RMU).

United States District Court, District of Columbia.

July 10, 2001

Mark S. Hegedus, Andrew K. Rosa, U.S. Department of Justice, Washington, DC, for plaintiff.

Mark Leddy, David Irving Gelfand, Cleary, Gottlieb, Steen & Hamilton, Washington, DC, for defendants.

MEMORANDUM OPINION

URBINA, District Judge.

Accepting the Consent Decree and Entering Final Judgment

I. Introduction

This antitrust case comes before the court on a motion by the United States for

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entry of final judgment with respect to a proposed consent decree. The issue before the court is whether the proposed consent decree is in "the public interest," as contemplated by the Tunney Act, 15 U.S.C. § 16(e). After careful consideration of the parties' submissions and the applicable law, the court concludes that the consent decree proposed by the government, with no opposition by the defendants, is in "the public interest." For the reasons stated below, the court grants the plaintiff's motion, accepts the consent decree, and orders the entry of final judgment.

II. Procedural History

On May 3, 2000, the United States filed a complaint pursuant to Title 15 U.S.C. § 25, alleging that the proposed merger between Alcoa, Inc. and Reynolds Metal Co. would, if consummated, violate Section 7 of the Clayton Act, 15 U.S.C. § 18 et seq. Specifically, the government alleged that unless restrained, the merger would eliminate actual and potential competition between Alcoa and Reynolds; substantially lessen competition in the production and sale of aluminum; and increase prices and decrease the amounts of smelter grade and chemical grade alumina. See Compl. at 9-10.

On May 12, 2000, shortly after the filing of the complaint, the parties moved for a "hold separate stipulation order" as well as a "conditional and provisional final judgment," which the court entered on the same day. Four days later, on May 16, 2000, after consulting with both parties via telephone conference, the court vacated the conditional and provisional final judgment so as to allow the parties to satisfy all the relevant provisions of Title 15 U.S.C. § 16(b). This section requires that the following documents be filed with the court and published in the Federal Register: a report pursuant to 15 U.S.C. § 16(g); a competitive impact statement; a response to public comments; and a certificate of compliance with provisions of the Antitrust Procedures and Penalties Act (or "Tunney Act"). Having complied with these provisions, the United States now moves for acceptance of the consent decree and entry of final judgment.

III. Background

Alcoa, Inc. is the largest aluminum company in the world. See Compl. ¶ 1; Competitive Impact Statement ("CIS") at 3. In 1999, Alcoa had revenues of more than $16 billion. See CIS at 3. Alcoa engages in all states of aluminum production, including mining raw aluminum ore ("bauxite"), refining bauxite into alumina powder, smelting alumina into metal ingots, and turning the metal ingots into end products. See id. Alcoa owns alumina factories in Western Australia, Brazil, Spain, the U.S. Virginia Islands, and Texas. See id. Alcoa also manages the operations of and has ownership interests in three alumina refinery joint ventures in Suriname, Brazil and Jamaica. See id.

Reynolds Metal Co. is the second largest aluminum company in the United States and the third largest in the world. See Compl. ¶ 1; CIS at 4. In 1999, Reynolds had revenues of more than $4.6 billion. See CIS at 4. Reynolds engages in all stages of aluminum production and, like Alcoa, owns interests in facilities around the world. See id. On August 18, 1999, Alcoa and Reynolds agreed that Alcoa would acquire Reynolds by exchanging each outstanding share of Reynolds common stock for 1.06 shares of Alcoa common stock, a transaction valued at $5 billion. See Compl. ¶ 8. This merger would create a single, fully integrated company engaged in all stages of aluminum production.

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Aluminum production yields two products, smelter grade alumina ("SGA") and chemical grade alumina ("CGA"),1 both of which are highly concentrated markets. The government alleges that the proposed merger will create monopoly power for Alcoa...

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