Please note that square brackets indicate text that has been deleted for reasons of
commercial confidentiality
ANTICIPATED ACQUISITION BY TETRA LAVAL GROUP OF PART OF CARLISLE
PROCESS SYSTEMS FROM CARLISLE COMPANIES INC
PROPOSED UNDERTAKINGS TO BE GIVEN BY TETRA LAVAL GROUP TO THE
OFFICE OF FAIR TRADING PURSUANT TO SECTION 73 OF THE ENTERPRISE ACT
2002
WHEREAS:
(a) Tetra Laval Group (TLG) proposes to acquire, through its subsidiary Tetra Pak
Processing Systems (TPPS), part of Carlisle Process Systems (CPS), a subsidiary of
Carlisle Companies Inc (CCI), by way of a share purchase agreement;
(b) It appears to the OFT that arrangements are in progress or contemplation which,
if carried into effect, will result in the creation of a relevant merger situation in the
UK;
(c) The OFT has a duty to refer an anticipated merger to the CC for further
investigation where it believes that it is or may be the case that the creation of that
merger situation may be expected to result in a substantial lessening of competition
within any market or markets in the UK for goods or services;
(d) Under section 73 of the Act the OFT may, instead of making such a reference
and for the purpose of remedying, mitigating or preventing the substantial lessening
of competition concerned or any adverse effect which may be expected to result
from it, accept undertakings to take such action as it considers appropriate, from
such of the parties concerned as it considers appropriate;
(e) The OFT considers that, in the absence of appropriate undertakings, it would be
under a duty to refer the acquisition of part of CPS by TPPS to the CC;
(f) The OFT further considers that the undertakings given below by TLG are
appropriate to remedy, mitigate or prevent the substantial lessening of competition,
or any adverse effect which may be expected to result from it, as specified in the
Decision;
NOW THEREFORE TLG hereby gives to the OFT the following undertakings for the
purpose of remedying, mitigating or preventing the substantial lessening of
competition, or any adverse effect which may be expected to result from it.
Effective date of the undertakings
1.1 These undertakings shall take effect from the date that, having been signed
by TLG, they are accepted by the OFT.
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The divestment
2.1 TLG shall, prior to acceptance of these undertakings by the OFT, agree to
divest to the satisfaction of the OFT the following (hereafter known as the
Divestment Package) to the purchaser, Moody plc Group, on the terms
approved in advance by the OFT:
(a) subject to paragraph 2.1(c), save in relation to the name
WINCANTON all intellectual property rights of in and to the
"Wincanton Vat", "Wincanton Cheese Machine", "Wincanton Salting
System 2000", "Wincanton Classic 40lb Cheese Tower" and
"Wincanton Curd Distributor" products (the Products), i.e. all
copyrights (including design drawings), design rights, know-how,
manuals and confidential information, in the form of an irrevocable
exclusive licence of indefinite duration granting the licensee the right
to use these intellectual property rights in the development,
manufacture, and distribution of the Products and related spare parts
worldwide for marketing and sale in the EEA. 1 This licence shall
permit the Products and related spare parts to be manufactured
worldwide for marketing and sale solely within the EEA;
(b) subject to paragraph 2.1(c), all intellectual property rights in and to
the name WINCANTON and related logo (including similar rights in
relation to the names "Wincanton Vat", "Wincanton Cheese
Machine", "Wincanton Classic 40lb Cheese Tower", "Wincanton Curd
Distributor" and "Wincanton Salting System 2000"), in the form of an
an irrevocable exclusive licence of indefinite duration granting the
licensee the right to use these intellectual property rights in the
marketing, sale and distribution of the Products and related spare
parts in the EEA;
(c) so far as these relate to the EEA, TLG will use all reasonable
endeavours to transfer any signed but not completed contracts of sale
for the Products and/or spare parts (save contracts in relation to
which fabrication work has started). In relation to signed but not
completed contracts for sale of the Products and/or spare parts which
are not transferred, paragraphs 2.1(a), 2.1(b) and 2.1(c) are
disapplied so as to permit TLG to supply the relevant Products and
spare parts.
(d) a copy of the specialised jigs and tools used in the manufacture of the
Products at CPS’s Sherborne (Dorset) facility; and
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For the avoidance of doubt, certain elements of these intellectual property rights are also used
in the "Damrow Double O Vat", the "Scherping Horizontal Cheese Vat", the "Damrow DMC",
the "CPS CCDC", the "CPS SMC" and the "Wincanton Hi-Flo Cheese Tower" and the rights to
these elements for the development, manufacture, marketing, sale and distribution of these
products and related spare parts world-wide will be retained.
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(e) details of all prospective sales or tenders and customer files and
records in relation to the sale and marketing of the Products in the
EEA.
2.2 TLG shall, at the option of the purchaser, as part of the divestment terms,
agree to:
(a) use reasonable endeavours to negotiate with [name of supplier] (a
supplier of pneumatic components for the "Wincanton Classic 40lb
Cheese Tower") and [name of supplier] (a supplier of conveyor belts
and related parts for the "Wincanton Cheese Machine") to ensure that
the purchaser has continued access to these parts (on terms to be
agreed between the purchaser and these suppliers); and
(b) put in place an arrangement to purchase, at a reasonable price and on
reasonable terms, spare parts for the Products from TLG for an initial
period of one year, extendable by agreement between TLG and the
purchaser; and
(c) sell to the purchaser an initial stock of spare parts for the Products
selected by the purchaser. For the avoidance of doubt, TLG is not
required by this to sell to the purchaser spare parts which CPS has not
sold in the EEA in the period 2003-2005 as a stand-alone item and is
only required to sell a reasonable number of units of any particular
spare part.
Approval of purchaser and terms of divestment
3.1 In order for the OFT to approve a proposed purchaser and the terms of
divestment for the Divestment Package sold in accordance with these
undertakings, TLG and/or any proposed purchaser will need to satisfy the
OFT that:
(a) the proposed purchaser is independent of and unconnected to TLG
and the Group of Interconnected Bodies Corporate to which TLG
belongs and any Associated Person or Affiliate of TLG or such Group
of Interconnected Bodies; and
(b) the proposed purchaser has and will continue to have the financial
resources, expertise and incentive to utilise the Divestment Package
as part of a viable and active business in competition with TLG and
other competitors; and
(c) the proposed purchaser must reasonably be expected by the OFT to
obtain all necessary approvals and consents from any regulatory
authority.
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3.2 The OFT may require TLG to provide it with such information and
documentation as it may reasonably require to demonstrate to the OFT that
the proposed purchaser will fulfill the requirements set out in paragraph 3.1
above.
Continued separation
4. Except with the prior written consent of the OFT, following the divestment
of the Divestment Package, TLG or any member of the Group of
Interconnected Bodies Corporate to which TLG belongs:
(a) shall not, directly or indirectly, hold, acquire, re-acquire or use:
(i) any Interest in the Divestment Package;
(ii) any Interest in any company carrying on or having Control of
the Divestment Package; or
(iii) other than in the ordinary course of business, any of the assets
of the Divestment Package;
(b) shall procure that no employee or director of TLG or of any member
of the Group of Interconnected Bodies Corporate to which TLG
belongs holds or is nominated to any directorship or managerial
position in any company or other undertaking utilising or having
Control of the Divestment Package without the OFT’s written
consent;
(c) shall not participate in the formulation of, or (other than in the
ordinary course of business) influence or attempt to influence, the
policy of any company or other undertaking utilising or having Control
of the Divestment Package; and
(d) shall not enter into or carry out any agreement or arrangement with
any person, if the carrying out of the agreement or arrangement is
intended to result or will result in any Associated Person or Affiliate of
TLG or of any member of the Group of Interconnected Bodies
Corporate to which TLG belongs directly or indirectly acquiring the
Divestment Package or doing any of the things listed in sub-
paragraphs (a), (b) and (c) above.
Additional obligations
5.1 For a period of three years from the date the undertakings are accepted, TLG
will not market in the UK, Isle of Man or the Republic of Ireland the “Damrow
Double O" vat, the "Scherping Horizontal Cheese Vat", the "Damrow DMC",
the "CPS CCDC", the "CPS SMC", the "Wincanton Hi-Flo Cheese Tower" or
the "Damrow BCF", save where rights will however be retained as necessary
in order to allow completion of the manufacture and sale of any contracts for
the Products, the "Damrow Double O Vat", the "Scherping Horizontal
Cheese Vat", the "Damrow DMC", the "CPS CCDC", the "CPS SMC" and
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the "Wincanton Hi-Flo Cheese Tower" or related spare parts in relation to
which fabrication work has started; and
5.2 TLG will not use the name WINCANTON in relation to any other products in
the EEA, save that Rights in and to the name WINCANTON and related logo
will however be retained as necessary in order to allow completion of the
manufacture and sale of any contracts for the Products and the "Wincanton
Hi-Flo Cheese Tower" or related spare parts in relation to which fabrication
work has started.
Compliance
6.1 TLG shall comply with such written directions as the OFT may from time to
time give:
(a) to take such steps as may be specified or described in the directions
for the purpose of carrying out or securing compliance with these
undertakings; or
(b) to do or refrain from doing anything so specified or described which
they might be required by these undertakings to do or to refrain from
doing.
6.2 TLG shall cooperate fully with the OFT when the OFT is:
(a) monitoring compliance with the provisions of these undertakings: and
(b) investigating potential breaches of the provisions of these
undertakings.
6.3 TLG shall procure that any member of the same Group of Interconnected
Bodies Corporate as TLG complies with these undertakings as if it had given
them.
6.4 Where any Affiliate of TLG is not a member of the same Group of
Interconnected Bodies Corporate as TLG, TLG shall use its best endeavours
to procure that any such Affiliate shall comply with these undertakings as if
it had given them.
Provision of Information
7. TLG shall furnish promptly to the OFT such information as the OFT considers
necessary to enable it to monitor these undertakings.
Interpretation
8.1 The Interpretation Act 1978 shall apply to these undertakings as it does to
Acts of Parliament.
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8.2 References in these undertakings to any English law term for any legal
status, interest, concept or thing shall in respect of any jurisdiction other
than England and Wales be deemed to include what most nearly
approximates in that jurisdiction to the English law term.
8.3 In these undertakings the word “including” shall mean including without
limitation or prejudice to the generality of any description, definition, term or
phrase preceding that word and the word “include” and its derivatives shall
be construed accordingly.
8.4 For the purposes of these undertakings:
“the Act” means the Enterprise Act 2002;
“Affiliate” of a person is another person who satisfies the following condition,
namely that any enterprise (which, in this context, has the meaning given in section
129(1) of the Act) that the first person carries on and any enterprise that the
second person carries on from time to time would be regarded as being under
common control for the purposes of section 26 of the Act;
“Associated Person” means a person or persons associated with TLG within the
meaning of section 127(4) of the Act and includes any Subsidiary of such a person
or persons;
“business” has the meaning given by section 129(1) and (3) of the Act;
“CC” means the Competition Commission;
“CCI” means Carlisle Companies Inc;
“Control” shall be construed in accordance with section 26 of the Act, and in the
case of a body corporate, a person shall be deemed to Control it if he holds, or has
an interest in, shares of that body corporate amounting to 10 per cent or more of
its issued share TLG or carrying an entitlement to vote at meetings of that body
corporate of 10 per cent or more of the total number of votes which may be cast at
such meetings;
“CPS” means Carlisle Process Systems;
“the Decision” means the OFT’s decision dated 20 July 2006 in connection with
the anticipated acquisition by TLG of part of CPS from CCI;
“the Divestment Package” means the rights, assets, and goodwill specified in
paragraph 2.1 above.
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“EEA” for the purposes of these undertakings includes the 25 member states of the
EU as at the date of these undertakings, plus Iceland, Norway, Lichtenstein, and
the Isle of Man;
“Interest” includes shares, an interest in shares and any other interest carrying an
entitlement to vote at shareholders’ meetings; and for this purpose “an interest in
shares” includes an entitlement by a person other than the registered holder, to
exercise any right conferred by the holding of these shares or an entitlement to
Control the exercise of such right;
“Group of Interconnected Bodies Corporate” has the meaning given in section
129(2) of the Act; references to a Group of Interconnected Bodies Corporate shall
be to the Group of Interconnected Bodies Corporate as constituted from time to
time;
“OFT” means the Office of Fair Trading;
“Subsidiary” shall be construed in accordance with section 736 of the Companies
Act 1985 (as amended), unless otherwise stated;
“TLG” means Tetra Laval Group;
“TPPS” means Tetra Pak Processing Systems;
“UK” means the United Kingdom of Great Britain and Northern Ireland;
FOR AND ON BEHALF OF TLG
…………………………………….. Signature ……………………………………. Signature
…………………………………….. Name ……………………………………. Name
…………………………………….. Title ……………………………………. Title
…………………………………….. Date ……………………………………. Date
(Director) (Director/Company Secretary)
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