As reported in this article by Jaret Seiberg in today’s The Daily Deal, an FTC administrative law judge ruled last Friday that Chicago Bridge & Iron Company NV’s 2001 acquisition of certain assets of two divisions of Pitt-Des Moines Inc. was anticompetitive and must be unwound within 180 days. The FTC’s extensive docket, in this case, does not yet include the ruling; so far all we have is this press release issued by Chicago Bridge last Friday announcing its intention to appeal the ruling.

I find two things interesting about this matter.

post10aFirst, the FTC began its investigation one month after the expiration of the mandatory 30-day HSR waiting period. According to CB&I;’s pre-trial brief (4 MB PDF), CB&I; delayed the closing for three months at the FTC’s request but, facing the possibility that the seller would liquidate the assets it wanted to buy, CB&I; went ahead and closed the transaction. Eight months after that, or about a year after the 30-day waiting period expired, the FTC instituted a formal action seeking to unwind the acquisition. This case is a useful reminder that Section 7A(i) of the Clayton Act (15 USC 18a) gives the FTC the power to attack completed mergers even after the HSR waiting period expires:

Any action taken by the Federal Trade Commission or the Assistant Attorney General or any failure of the Federal Trade Commission or the Assistant Attorney General to take any action under this section [the HSR Act] shall not bar any proceeding or any action with respect to such acquisition at any time under any other section of this Act or any other provision of law. Before this case was announced, I think most of us thought the FTC would act after the HSR expiration period only if the HSR forms were inaccurate, misleading or omitted key information.

The second interesting thing is…

post10bThe FTC sought, and last Friday it apparently obtained, a ruling that would order CB&I; to unwind the 2001 transaction. It appears that CB&I; integrated the purchased assets into its own business during the three years since the deal closed. One wonders how CB&I; can now separate joined assets and re-start plants that were shut down (both plants purchased in the 2001 acquisition and any that CB&I; previously held and shut down as a result of the acquisition).

One wonders how CB&I; can separate its customers, deciding which belong with it and which belong with the spun-off operation. One wonders who will run the spun-off operation — the company that sold the assets to CB&I; in 2001 does not appear to be part of this proceeding and therefore would not be required to take the assets back. If the FTC cannot turn back the clock and create a viable competitor, one wonders whether the FTC’s victory will have any pro-competitive effects.


This whole story lasted half a decade, and it finally ended in 2008. How many cases big as this lasted as this one? It is truly a part of history that is important to everyone interested in this type of law. How it has begun is maybe the most important part because it is easy to forget all of it once the story has ended. And it did, in 2008, after a full seven years.