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FTC seeks comment on Charlotte Pipe anticompetition deal

Keywords: Tags  FTC, Charlotte Pipe, Star Pipe, anticompetition agreement, McWane, Thorsten Schier

NEW YORK — A proposed consent order settling anticompetition charges over Charlotte Pipe & Foundry Co.’s 2010 purchase of the cast iron soil pipe business of Star Pipe Products Ltd. has been released for public comment by the U.S. Federal Trade Commission (FTC).

The order prohibits Charlotte Pipe "from enforcing a confidentiality and noncompete agreement with Star Pipe, ensures that (the company) will publicly disclose its prior acquisitions of other (soil pipe) importers and requires (the company) to notify the commission before making future acquisitions in this industry," the FTC said.

"We are pleased to have this matter resolved and behind us so we can focus on our customers," a Charlotte Pipe spokesman told AMM, adding that the Charlotte, N.C.-based company "cooperated fully with the investigation and resolved the matter to avoid the additional expense and uncertainty associated with (it)."

Charlotte Pipe bought Star Pipe’s cast iron soil pipe business for $19 million in 2010, reducing competition for the product in the market and allowing Charlotte Pipe to raise prices, according to the FTC.

Charlotte Pipe and Star Pipe employees also entered into an agreement to keep the acquisition a secret and signed a six-year noncompete agreement following the sale, the FTC said.

Houston-based Star Pipe said in a letter to customers that it had "decided to exit" the cast iron soil pipe business, according to the FTC’s original complaint, which also said Charlotte Pipe destroyed Star Pipe’s cast iron soil pipe production equipment in China following the sale.

Cast iron soil pipe is used to transport wastewater from buildings to municipal sewage systems, vent plumbing systems and transport rainwater to storm drains. The U.S. market for the product is highly concentrated. As of 2010, Charlotte Pipe and Birmingham, Ala.-based McWane Inc. controlled 90 percent of the market, the FTC said.

Charlotte Pipe had bought other competitors in the sector at various times since the early 2000s, the original complaint said.

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