`
`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
`
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`
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`
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`Civil Action No.:
`
`
`Judge:
`
`
`UNITED STATES OF AMERICA
`U.S. Department of Justice
`Antitrust Division
`450 Fifth Street, N.W., Suite 8700
`Washington, DC 20530,
`
`Plaintiff,
`
`
`v.
`
`STONE CANYON INDUSTRIES HOLDINGS
`LLC
`1875 Century Park East, Suite 320
`Los Angeles, CA 90067,
`
`SCIH SALT HOLDINGS INC.
`10995 Lowell Avenue, Suite 500
`Overland Park, KS 66210,
`
`K+S AKTIENGESELLSCHAFT
`Bertha-von-Suttner-Str. 7
`34131 Kassel, Hesse
`Germany,
`
`
`and
`
`MORTON SALT, INC.
`444 West Lake Street, Suite 300
`Chicago, IL 60606,
`
`
`Defendants.
`
`COMPLAINT
`
`The United States of America (“United States”), acting under the direction of the
`
`
`
`
`
`
`
`
`
`
`Attorney General of the United States, brings this civil antitrust action against Defendants Stone
`
`Canyon Industries Holdings LLC (“Stone Canyon”), SCIH Salt Holdings Inc. (“SCIH”), K+S
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`Aktiengesellschaft (“K+S AG”), and Morton Salt, Inc. (“Morton”) to enjoin SCIH’s proposed
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`
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 2 of 18
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`acquisition of assets including Morton from K+S AG. The United States complains and alleges
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`as follows:
`
`I.
`
`NATURE OF THE ACTION
`
`1.
`
`Pursuant to a Transaction Agreement dated October 5, 2020, SCIH intends to
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`acquire assets including Morton from K+S AG for approximately $3.2 billion. As a result of the
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`acquisition, SCIH would control both Morton and US Salt, which are the largest suppliers of
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`certain evaporated salt products in the United States.
`
`2.
`
`Together, Morton and US Salt would have a monopoly in the United States and
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`Canada for pharmaceutical-grade salt, the purest grade of evaporated salt, which is used to make
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`life-saving treatments and products for patients in need of dialysis fluid, intravenous saline
`
`solution, or other medical products.
`
`3.
`
`Additionally, Morton and US Salt are two of only three companies that supply
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`U.S. households with “round-can” table salt, a type of evaporated salt that is sold in 26-ounce
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`round containers with a metal spout and used to flavor food.
`
`4.
`
`Morton and US Salt are also two of only three major suppliers in the northeastern
`
`United States of bulk evaporated salt, which is used by food processors and chemical
`
`manufacturers to make pre-packaged food and everyday cleaning products.
`
`5.
`
`Today, customers benefit from competition between Morton and US Salt in the
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`form of lower prices, higher quality products, and/or improved service. The proposed
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`transaction would eliminate this competition, driving the opposite result: higher prices, lower
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`quality products, and poorer service for customers of pharmaceutical-grade salt in the United
`
`States and Canada, for customers of round-can table salt in the United States, and for customers
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`of bulk evaporated salt in the northeastern United States.
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`2
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 3 of 18
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`6.
`
`Accordingly, SCIH’s acquisition of Morton would violate Section 7 of the
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`Clayton Act, 15 U.S.C. § 18, and should be enjoined.
`
`II.
`
`THE PARTIES AND THE TRANSACTION
`
`7.
`
`K+S AG is a chemical company headquartered in Kassel, Germany. In 2020,
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`K+S AG reported revenues of approximately $4.4 billion. K+S AG’s Operating Unit Salt
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`Americas business includes Morton as well as K+S Windsor Salt, which sells salt products in
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`Canada, and Sociedad Punta de Lobos, which sells salt products in Chile.
`
`8.
`
`Morton is a K+S AG subsidiary with approximately $1 billion in revenue in 2020.
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`Morton is the largest supplier of pharmaceutical-grade salt in the United States and Canada, the
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`largest supplier of round-can table salt in the United States, and one of only three suppliers of
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`bulk evaporated salt in the northeastern United States.
`
`9.
`
`Stone Canyon is an industrial holding company incorporated in Delaware and
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`headquartered in Los Angeles, California. Stone Canyon acquired Kissner Group Holdings LP,
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`which it later renamed SCIH, in April 2020.
`
`10.
`
`SCIH is a subsidiary of Stone Canyon and is headquartered in Overland Park,
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`Kansas. In 2020, SCIH had revenues of approximately $1 billion. SCIH is a leading supplier of
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`salt products, including evaporated salt.
`
`11.
`
`US Salt, a subsidiary of SCIH with approximately $95 million in revenues in
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`2020, is the nation’s second-largest supplier of pharmaceutical-grade salt in the United States
`
`and Canada, the second-largest supplier of round-can table salt in the United States, and one of
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`only three suppliers of bulk evaporated salt in the northeastern United States.
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`3
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 4 of 18
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`12.
`
`Pursuant to a Transaction Agreement dated October 5, 2020, SCIH agreed to
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`acquire K+S AG’s Operating Unit Salt Americas business, including Morton, for approximately
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`$3.2 billion.
`
`III.
`
`JURISDICTION AND VENUE
`
`13.
`
`The United States brings this action under Section 15 of the Clayton Act, 15
`
`U.S.C. § 25, to prevent and restrain Defendants from violating Section 7 of the Clayton Act, 15
`
`U.S.C. § 18.
`
`14.
`
`Defendants’ activities substantially affect interstate commerce. Defendants sell
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`pharmaceutical-grade salt and round-can table salt throughout the United States and bulk
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`evaporated salt throughout the northeastern United States. This Court has subject matter
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`jurisdiction over this matter pursuant to Section 15 of the Clayton Act, 15 U.S.C. § 25, and 28
`
`U.S.C. §§ 1331, 1337(a), and 1345.
`
`15.
`
`Defendants have consented to venue and personal jurisdiction in this judicial
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`district. Venue is proper under Section 12 of the Clayton Act, 15 U.S.C. § 22, and 28 U.S.C. §
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`1391(b) and (c)(2), for Stone Canyon, SCIH, and Morton, and venue is proper for K+S AG, a
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`German corporation, under 28 U.S.C. § 1391(c)(3).
`
`IV. RELEVANT MARKETS
`
`A.
`
`Relevant Product Markets
`
`16. Morton and SCIH’s US Salt subsidiary both produce and sell evaporated salt.
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`Evaporated salt is a type of sodium chloride produced through “vacuum evaporation.” In the
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`vacuum evaporation process, water is pumped into a salt deposit where the salt dissolves, and the
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`resulting brine is forced into an evaporator on the surface where it is boiled in a series of pans
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`until only the salt remains. Evaporated salt is nearly 100% sodium chloride and contains almost
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`4
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 5 of 18
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`no other trace minerals. Because of the evaporation process, individual grains of evaporated salt
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`are also more consistent and regularly shaped than other forms of salt.
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`17.
`
`Evaporated salt is distinct from salt created through other production methods,
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`such as rock salt and solar salt. Rock salt is mined and then crushed into smaller sizes before
`
`being transported to the surface. Rock salt is less expensive to produce than evaporated salt, but
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`it is also coarser, irregularly shaped, and contains other minerals and impurities. As a result,
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`rock salt is used for applications that have less demanding quality requirements such as de-icing
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`roads. Solar salt is created when salt water is captured in shallow ponds where the sun
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`evaporates most of the water. It can only be produced in warm climates where the evaporation
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`rate exceeds the precipitation rate. Solar salt is less pure and not as uniform in shape as
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`evaporated salt, but it is purer than rock salt. Solar salt is used for applications such as water
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`softening.
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`18.
`
`Evaporated salt typically is used in applications that require the highest quality of
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`salt, such as human consumption. There are different types of evaporated salt that have different
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`characteristics, end uses, and customers. Three types of evaporated salt produced by Defendants
`
`constitute relevant product markets—pharmaceutical-grade salt, round-can table salt, and bulk
`
`evaporated salt.
`
`i.
`
` Pharmaceutical-Grade Salt
`
`19.
`
`Pharmaceutical-grade salt is the grade of salt with the highest percentage of
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`sodium chloride and thus is the purest grade of evaporated salt. Pharmaceutical-grade salt is
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`used in the pharmaceutical industry as a building block for a number of life-saving treatments
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`and products, including dialysis fluid, intravenous saline solution, and other medical products.
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`Pharmaceutical-grade salt must be evaporated from salt deposits of extremely high purity and
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`5
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 6 of 18
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`then undergo post-production processing to ensure that it contains virtually no trace minerals or
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`other impurities.
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`20.
`
`Because of these stringent standards, the mining and production process for
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`pharmaceutical-grade salt must be extensively monitored and documented to ensure purity and
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`consistency across production batches. This documentation must then be provided to customers
`
`as a validation of the quality and purity of the pharmaceutical-grade salt.
`
`21.
`
`Rock salt and solar salt do not meet the purity requirements for pharmaceutical-
`
`grade salt. Other grades of evaporated salt—for example, salt used in food processing—also
`
`cannot serve as a substitute for pharmaceutical-grade salt. Pharmaceutical-grade salt must
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`contain a higher percentage of sodium chloride than other types of evaporated salt. This ensures
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`that it does not contain trace minerals that would impact the efficacy of pharmaceutical products
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`made using pharmaceutical-grade salt. Pharmaceutical-grade salt also cannot contain additives
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`such as anti-caking agents that are added during the processing of other types of evaporated salt.
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`Because of these requirements, pharmaceutical-grade salt is more difficult to produce than other
`
`forms of evaporated salt.
`
`22.
`
`In the event of a small but significant increase in price by a hypothetical
`
`monopolist of pharmaceutical-grade salt, substitution away from pharmaceutical-grade salt
`
`would be insufficient to render the price increase unprofitable. Pharmaceutical-grade salt is
`
`therefore a line of commerce, or relevant product market, for purposes of analyzing the effects of
`
`the acquisition under Section 7 of the Clayton Act, 15 U.S.C. § 18.
`
`ii.
`
`Round-Can Table Salt
`
`23.
`
`Table salt is evaporated salt that is processed for human consumption. It is
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`regulated by the Food and Drug Administration (“FDA”) and must meet high purity standards.
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`6
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 7 of 18
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`Table salt also has a highly consistent size across granules and contains agents to prevent
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`clumping and evaporation. Without additional processing—which raises price considerably—
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`rock salt and solar salt cannot meet the same purity requirements or achieve the same consistent
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`granule size as table salt. Pharmaceutical-grade salt meets the purity requirements for table salt
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`but does not contain the necessary agents to prevent clumping and evaporation. As such, rock
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`salt, solar salt, and pharmaceutical-grade salt are not substitutes for table salt.
`
`24.
`
`In the United States, the packaging format strongly preferred by consumers for
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`table salt is the round can, which is a 26-ounce cardboard cylinder with a paper label and a metal
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`spout. The round-can’s size, shape, material, and metal spout make it an easy receptacle to use
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`one-handed without spilling while cooking or refilling a salt shaker, which is a product
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`characteristic that is highly valued by consumers. Reflecting consumer preference, retailers like
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`grocery stores dedicate shelf space specifically to round-can packaging. As a result,
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`approximately 95% of the table salt sold to consumers in the United States is sold in a round can.
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`25.
`
`Table salt packaged in other containers, such as boxes or bags, is not a reasonable
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`substitute for round-can table salt. Boxes without a metal spout and bags are more difficult to
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`use and store and may spill once opened. Larger packages of table salt also are not reasonable
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`substitutes for round-can table salt, as they contain significantly more salt than an individual can
`
`practically use.
`
`26.
`
`In the event of a small but significant increase in price by a hypothetical
`
`monopolist of round-can table salt, substitution away from round-can table salt would be
`
`insufficient to render the price increase unprofitable. Round-can table salt is therefore a line of
`
`7
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 8 of 18
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`commerce, or relevant product market, for purposes of analyzing the effects of the acquisition
`
`under Section 7 of the Clayton Act, 15 U.S.C. § 18.
`
`iii.
`
`Bulk Evaporated Salt
`
`27.
`
`Bulk evaporated salt is salt that is of sufficient purity to be used for human
`
`consumption that is sold in bulk form. Bulk evaporated salt is used to manufacture chemicals
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`necessary to create essential everyday cleaning products such as disinfectants, soap, and bleach.
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`Bulk evaporated salt is also an essential ingredient in nearly all processed pre-packaged foods,
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`such as sauces, chips and other snacks, and frozen meals. Because bulk evaporated salt is
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`incorporated into products end-consumers ingest or touch, it is regulated by the FDA and must
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`meet stringent purity requirements.
`
`28.
`
`Customers for bulk evaporated salt include chemical companies and large pre-
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`packaged food manufacturers as well as smaller customers, such as bakeries, that use salt as an
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`essential ingredient in their food products. To accommodate these customers, many of whom
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`purchase thousands of tons of salt per year, evaporated salt is sold in bulk, by the truckload or in
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`containers ranging from 50-pound bags to 2,000-pound “super-sacks.”
`
`29.
`
`Bulk evaporated salt is distinct from evaporated salt used for other applications.
`
`Compared to other types of evaporated salt, it has unique end-uses, customers, and packaging.
`
`While pharmaceutical-grade salt and round-can table salt are of sufficient purity, they are priced
`
`too high and packaged in quantities that are too small to serve as substitutes for bulk evaporated
`
`salt. Bulk evaporated salt also is distinct from rock salt and solar salt, which have lower purity
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`8
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 9 of 18
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`levels and non-uniform textures that make them unsuitable for chemical and food-production end
`
`uses. None of these types of salt can serve as a substitute to bulk evaporated salt.
`
`30.
`
`In the event of a small but significant increase in price by a hypothetical
`
`monopolist of bulk evaporated salt, substitution away from bulk evaporated salt would be
`
`insufficient to render the price increase unprofitable. Bulk evaporated salt is therefore a line of
`
`commerce, or relevant product market, for purposes of analyzing the effects of the acquisition
`
`under Section 7 of the Clayton Act, 15 U.S.C. § 18.
`
`B.
`
`Relevant Geographic Markets
`
`i.
`
`Pharmaceutical-Grade Salt
`
`31.
`
`Pharmaceutical-grade salt is manufactured in only a few locations in the United
`
`States. From these locations, pharmaceutical-grade salt is shipped to customers throughout the
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`United States and Canada.
`
`32. While pharmaceutical-grade salt is shipped throughout the United States and
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`Canada, shipping it from overseas is prohibitively expensive. This is because pharmaceutical-
`
`grade salt may not contain anti-caking agents. Without anti-caking agents, pharmaceutical-grade
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`salt has a short shelf-life and may be damaged by the time and rigors of ocean-shipping. These
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`limitations make ocean-shipping cost-prohibitive.
`
`33.
`
`A hypothetical monopolist of pharmaceutical-grade salt in the United States and
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`Canada could profitably impose a small but significant non-transitory increase in price for
`
`pharmaceutical-grade salt without losing sufficient sales to render the price increase unprofitable.
`
`Accordingly, the relevant geographic market for the purposes of analyzing the effects of the
`
`acquisition on pharmaceutical-grade salt under Section 7 of the Clayton Act, 15 U.S.C. § 18, is
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`the United States and Canada.
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`9
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 10 of 18
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`ii.
`
`Round-Can Table Salt
`
`34.
`
`Competition among round-can table salt suppliers occurs at a national level.
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`Retailers, many of which are grocery store chains, mass merchandisers, or convenience stores
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`with large national footprints, purchase round-can table salt for all of their locations at once, and
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`suppliers ship round-can table salt from coast to coast.
`
`35.
`
`Round-can table salt is not imported from outside the United States. In addition
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`to being heavy—and therefore expensive to transport—table salt in other countries is typically
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`sold in bags or cardboard boxes. As such, foreign suppliers of table salt typically lack the
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`production facilities to produce round cans for the United States market.
`
`36.
`
`A hypothetical monopolist of round-can table salt in the United States could
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`profitably impose a small but significant non-transitory increase in price for round-can table salt
`
`without losing sufficient sales to render the price increase unprofitable. Accordingly, the
`
`relevant geographic market for the purposes of analyzing the effects of the acquisition on round-
`
`can table salt under Section 7 of the Clayton Act, 15 U.S.C. § 18, is the United States.
`
`iii.
`
`Bulk Evaporated Salt
`
`37.
`
`Bulk evaporated salt is a product that can be produced at a relatively low cost, but
`
`it is heavy and therefore expensive to transport. As a result, customers purchase from nearby
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`suppliers to minimize shipping costs that can be high relative to the value of the bulk evaporated
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`salt being purchased.
`
`38.
`
`Both Morton and US Salt—along with only one other competitor—operate bulk
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`evaporated salt production facilities in upstate New York. All three companies use these
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`facilities to service customers in the northeastern United States, including Connecticut,
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`Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode
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`10
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 11 of 18
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`Island, and Vermont. Customers in the northeastern United States can economically procure
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`bulk evaporated salt from only these three locations. Other more distant bulk evaporated salt
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`facilities cannot compete successfully on a regular basis for customers in the northeastern United
`
`States because the suppliers are too far away, making transportation costs too great.
`
`39.
`
`A hypothetical monopolist of bulk evaporated salt in the northeastern United
`
`States could profitably impose a small but significant non-transitory increase in price for bulk
`
`evaporated salt without losing sufficient sales to render the price increase unprofitable.
`
`Accordingly, the relevant geographic market for the purposes of analyzing the effects of the
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`acquisition on bulk evaporated salt under Section 7 of the Clayton Act, 15 U.S.C. § 18, is the
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`northeastern United States.
`
`V.
`
`ANTICOMPETITIVE EFFECTS
`
`40.
`
`The proposed transaction would lessen competition and harm customers for
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`pharmaceutical-grade salt in the United States and Canada, round-can table salt in the United
`
`States, and bulk evaporated salt in the northeastern United States by eliminating the substantial
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`head-to-head competition that currently exists between Morton and US Salt. Customers in each
`
`of these markets would pay higher prices and receive lower quality and service as a result of the
`
`acquisition.
`
`A.
`
`Pharmaceutical-Grade Salt in the United States and Canada
`
`41. Morton and US Salt are the only two suppliers of pharmaceutical-grade salt in the
`
`United States and Canada, with Morton currently having a market share of around 77% and US
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`Salt a share of around 23%. The acquisition would thus give the combined firm a monopoly in
`
`the sale of pharmaceutical-grade salt in the United States and Canada, leaving pharmaceutical
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`11
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 12 of 18
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`companies and other customers without a competitive alternative for this critical ingredient in
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`dialysis fluid, intravenous saline solution, and other medical products.
`
`42. Morton and US Salt compete to sell pharmaceutical-grade salt on the basis of
`
`quality and surety of supply. This competition has resulted in higher quality, lower prices, and
`
`better customer service. The combination of Morton and US Salt would eliminate this
`
`competition and its future benefits to customers, including pharmaceutical companies. Post-
`
`acquisition, the combined Morton and US Salt likely would have the incentive and ability to
`
`increase prices and offer less favorable contractual terms.
`
`43.
`
`The proposed acquisition, therefore, likely would substantially lessen competition
`
`in the production of pharmaceutical-grade salt in the United States and Canada in violation of
`
`Section 7 of the Clayton Act, 15 U.S.C. § 18.
`
`B.
`
`Round-Can Table Salt in the United States
`
`44. Morton and US Salt are two of the largest table salt suppliers in the United States
`
`and are two of only three suppliers of round-can table salt in the United States. Morton is the
`
`largest supplier of branded round-can table salt in the United States. US Salt is the largest
`
`supplier of private-label round-can table salt—which is made by US Salt but sold under the
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`brands of retailers and other third-parties—in the United States. US Salt is also the second-
`
`largest supplier of branded round-can table salt, with around six percent of sales.
`
`45.
`
`Today, US Salt’s private-label and branded round-can table salt products compete
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`directly with Morton’s branded round-can table salt. Together, the combined firm would control
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`at least 90% of the round-can table salt market in the United States.
`
`46.
`
`The combination of Morton and US Salt would eliminate the head-to-head
`
`competition between Morton and US Salt and leave customers in the United States with only two
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`12
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 13 of 18
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`alternatives for round-can table salt in the United States. Post-acquisition, the combined firm
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`likely would have the incentive and ability to increase prices and offer less favorable contractual
`
`terms.
`
`47. Morton and US Salt compete for sales of round-can table salt on the basis of
`
`quality, price, and contractual terms such as delivery times. This competition has resulted in
`
`higher quality, lower prices, and more reliable delivery. The combination of Morton and US Salt
`
`would eliminate this competition and its future benefits to customers, including grocery chains,
`
`big box stores, and discount stores.
`
`48.
`
` The proposed acquisition, therefore, likely would substantially lessen
`
`competition in the production of round-can table salt in the United States in violation of Section
`
`7 of the Clayton Act, 15 U.S.C. § 18.
`
`C.
`
`49.
`
`Bulk Evaporated Salt in the Northeastern United States
`
`
`
`Three bulk evaporated salt suppliers—Morton, US Salt, and one additional
`
`competitor, each with production facilities in upstate New York—compete for bulk evaporated
`
`salt customers in the northeastern United States. The combination of Morton and US Salt would
`
`eliminate the head-to-head competition between the parties and result in only two remaining
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`competitors in the region.
`
`50.
`
`Bulk evaporated salt customers in the northeastern United States, including food
`
`processors and chemical manufacturers, have been able to secure lower prices and improved
`
`quality and service—such as more reliable delivery—by threatening to switch between Morton
`
`and US Salt. The elimination of this head-to-head competition would allow a combined Morton
`
`and US Salt to exercise market power to unilaterally increase prices and reduce the quality and
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`service for bulk evaporated salt customers in the northeastern United States.
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`13
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 14 of 18
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`51.
`
`The proposed acquisition, therefore, likely would substantially lessen competition
`
`in the production of bulk evaporated salt in the northeastern United States in violation of Section
`
`7 of the Clayton Act, 15 U.S.C. § 18.
`
`VI.
`
`ENTRY
`
`A.
`
`Difficulty of Entry into Pharmaceutical-Grade Salt in the United States and
`Canada
`
`52.
`
`Entry of new competitors into pharmaceutical-grade salt in the United States
`
`would be difficult and time-consuming and is unlikely to prevent the harm to competition that is
`
`likely to result if the proposed transaction is consummated.
`
`53.
`
`A potential pharmaceutical-grade salt entrant would need to acquire suitable land
`
`that includes a salt deposit of sufficient purity, obtain the permits necessary to construct an
`
`evaporation and processing facility, possess or obtain appropriate financing for a significant
`
`capital expenditure, and then design, construct, and qualify the facility. This process would likely
`
`take several years, at a minimum. No new evaporated salt facility has been constructed in the
`
`United States in over 20 years.
`
`54.
`
`Even if an entrant was able to construct an evaporated salt production facility,
`
`before selling a single grain of pharmaceutical-grade salt, it would need to install and test
`
`additional equipment needed to meet the exacting purity requirements for pharmaceutical-grade
`
`salt. Reputational barriers make entry even more difficult, as customers would be reluctant to
`
`switch to an unproven supplier that could not guarantee access to high-quality pharmaceutical-
`
`grade salt. Thus, entry would not be timely, likely, or sufficient to mitigate the anticompetitive
`
`effects from SCIH’s proposed acquisition of Morton.
`
`B.
`
`55.
`
`Difficulty of Entry into Round-Can Table Salt in the United States
`
`Entry of new competitors into round-can table salt in the United States would be
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`14
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`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 15 of 18
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`difficult and time-consuming and is unlikely to prevent the anticompetitive effects that are likely
`
`to result if the proposed transaction is consummated.
`
`56.
`
`Even though table salt has lower purity requirements than pharmaceutical-grade
`
`salt, a round-can table salt entrant would still need to take all of the steps to construct a facility
`
`that a pharmaceutical-grade salt entrant would, including locating an appropriate salt deposit, and
`
`investing significant time and money to build the facility.
`
`57.
`
`In addition, an entrant in round-can table salt would have to secure a round-can
`
`packaging line. The packaging process for round-can table salt, created decades ago, is based on
`
`technology from that era and has proven to be difficult to replicate in a price-competitive
`
`manner. As a result, potential entrants with access to suitable salt deposits have tried, and failed,
`
`to develop round-can packaging technology in the last five years.
`
`58.
`
`Entry through the construction of a new round-can table salt facility therefore will
`
`not be timely, likely, or sufficient to mitigate the anticompetitive effects of SCIH’s proposed
`
`acquisition of Morton.
`
`C.
`
`Difficulty of Entry into Bulk Evaporated Salt in the Northeastern United
`States
`
`59.
`
`Entry of new competitors into bulk evaporated salt in the northeastern United
`
`States would be difficult and time-consuming and is unlikely to prevent the harm to competition
`
`that is likely to result if the proposed transaction is consummated.
`
`60.
`
`Just as with pharmaceutical-grade salt or round-can table salt, a new entrant in
`
`bulk evaporated salt would need to invest significant time and money to acquire land and
`
`construct an evaporated salt processing facility. Entry into bulk evaporated salt in the
`
`northeastern United States is particularly difficult because this area has limited salt deposits,
`
`which are necessary serve the market.
`
`15
`
`
`
`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 16 of 18
`
`61.
`
`Entry through the construction of a new bulk evaporated salt production facility
`
`will therefore not be timely, likely, or sufficient to mitigate the anticompetitive effects from
`
`SCIH’s proposed acquisition of Morton.
`
`VII. VIOLATIONS ALLEGED
`
`62.
`
`SCIH’s proposed acquisition of Morton is likely to substantially lessen
`
`competition in the production and sale of evaporated salt products, including pharmaceutical-
`
`grade salt in the United States and Canada, round-can table salt in the United States, and bulk
`
`evaporated salt in the northeastern United States, in violation of Section 7 of the Clayton Act, 15
`
`U.S.C. § 18.
`
`63.
`
`The acquisition will likely have the following anticompetitive effects, among
`
`others, in the relevant markets:
`
`a.
`
`actual and potential competition between Morton and US Salt will be
`
`eliminated;
`
`b.
`
`c.
`
`competition generally will be substantially lessened; and
`
`prices will likely increase and quality and the level of service will likely
`
`decrease.
`
`VIII. REQUEST FOR RELIEF
`
`64.
`
`The United States requests that this Court:
`
`a.
`
`adjudge and decree SCIH’s acquisition of Morton to be unlawful and in
`
`violation of Section 7 of the Clayton Act, 15 U.S.C. § 18;
`
`b.
`
`preliminarily and permanently enjoin Defendants and all persons acting on
`
`their behalf from consummating the proposed acquisition by SCIH of
`
`Morton or from entering into or carrying out any other contract,
`
`16
`
`
`
`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 17 of 18
`
`agreement, plan, or understanding, the effect of which would be to
`
`combine Morton with US Salt;
`
`award the United States the costs for this action; and
`
`grant the United States such other relief as the Court deems just and
`
`c.
`
`d.
`
`
`
`proper.
`
`
`
`17
`
`
`
`Case 1:21-cv-01067-TJK Document 1 Filed 04/19/21 Page 18 of 18
`
`Dated: April 19, 2021
`
`Respectfully submitted,
`
`COUNSEL FOR PLAINTIFF UNITED STATES:
`
` /s/ Richard Powers
`RICHARD POWERS
`Acting Assistant Attorney General
`Antitrust Division
`
` /s/ Kathleen S. O’Neill
`KATHLEEN S. O’NEILL
`Senior Director of Investigation and Litigation
`Antitrust Division
`
` /s/ Katrina Rouse
`KATRINA ROUSE (D.C. Bar #1013035)
`Chief
`Defense, Industrials, and Aerospace Section
`Antitrust Division
`
` /s/ Jay D. Owen
`JAY D. OWEN
`Assistant Chief
`Defense, Industrials, and Aerospace Section
`Antitrust Division
`
`
`
` /s/ Kerrie J. Freeborn
`KERRIE J. FREEBORN* (D.C. Bar #503143)
`BINDI BHAGAT
`JANET BRODY
`GABRIELLA R. MOSKOWITZ (D.C. Bar #1044309)
`REBECCA VALENTINE (D.C. Bar #989607)
`Trial Attorneys
`
`Defense, Industrials, and Aerospace Section
`Antitrust Division
`450 Fifth Street N.W., Suite 8700
`Washington, DC 20530
`Telephone: (202) 476-9160
`Facsimile: (202) 514-9033
`Email: kerrie.freeborn@usdoj.gov
`
`*LEAD ATTORNEY TO BE NOTICED
`
`18
`
`