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with section 207.30 of the Commission’s proposed acquisition of Faiveley brake equipment components that make rules. All written submissions must Transport S.A. and Faiveley Transport up a critical system intimately linked to conform with the provisions of section North America would violate Section 7 both the performance and safety of 201.8 of the Commission’s rules; any of the Clayton Act, 15 U.S.C. 18. The trains. Faiveley produces its brake submissions that contain BPI must also proposed Final Judgment, filed at the system components in the United States conform with the requirements of same time as the Complaint, requires through its subsidiary, Faiveley sections 201.6, 207.3, and 207.7 of the Wabtec to divest Faiveley’s U.S. freight Transport North America. Wabtec is a Commission’s rules. The Commission’s brakes business. leading manufacturer of rail equipment Handbook on E-Filing, available on the Copies of the Complaint, proposed used in the assembly of freight cars built Commission’s Web site at https:// Final Judgment, and Competitive Impact for use in the U.S. freight rail network. edis.usitc.gov, elaborates upon the Statement are available for inspection For purchasers of components of freight Commission’s rules with respect to on the Antitrust Division’s Web site at car brake systems, Wabtec and Faiveley electronic filing. http://www.justice.gov/atr and at the are two of the top three suppliers Additional written submissions to the Office of the Clerk of the United States approved by the Association of Commission, including requests District Court for the District of American Railroads (‘‘AAR’’), with pursuant to section 201.12 of the Columbia. Copies of these materials may combined market shares ranging from Commission’s rules, shall not be be obtained from the Antitrust Division approximately 41 to 96 percent for accepted unless good cause is shown for upon request and payment of the many of the products in which they accepting such submissions, or unless copying fee set by Department of Justice compete. Where a product must be AAR the submission is pursuant to a specific regulations. approved, customers must source it request by a Commissioner or Public comment is invited within 60 from an AAR-approved supplier of that Commission staff. days of the date of this notice. Such product. In accordance with sections 201.16(c) comments, including the name of the 2. In 2010, Faiveley entered into a and 207.3 of the Commission’s rules, submitter, and responses thereto, will be joint venture with Amsted Rail each document filed by a party to the posted on the Antitrust Division’s Web Company, Inc. (‘‘Amsted’’), a rail investigation must be served on all other site, filed with the Court, and, under equipment supplier based in Chicago, parties to the investigation (as identified certain circumstances, published in the Illinois, to form Amsted Rail Faiveley by either the public or BPI service list), Federal Register. Comments should be LLC (‘‘ARF’’). Faiveley owns 67.5 and a certificate of service must be directed to Maribeth Petrizzi, Chief, percent of ARF and Amsted owns the timely filed. The Secretary will not Litigation II Section, Antitrust Division, remaining 32.5 percent interest in the accept a document for filing without a Department of Justice, 450 Fifth Street joint venture. As part of the joint certificate of service. NW., Suite 8700, Washington, DC 20530 venture, all of the freight car brake Authority: This investigation is being (telephone: 202–307–0924). system components that are conducted under authority of title VII of manufactured by Faiveley Transport Patricia A. Brink, North America are marketed and sold to the Tariff Act of 1930; this notice is Director of Civil Enforcement. published pursuant to section 207.21 of customers by Amsted. Amsted and the Commission’s rules. United States District Court for the Faiveley do not compete for the sale of District of Columbia brake system components. Critically, the By order of the Commission. joint venture allows Faiveley to bundle Issued: November 1, 2016. United States of America, U.S. Department brake components with Amsted’s other Lisa R. Barton, of Justice, Antitrust Division, 450 Fifth Street products such as wheels and axles, NW., Suite 8700, Washington, DC 20530 Secretary to the Commission. Plaintiff, v. Westinghouse Air Brake thereby increasing its ability to compete [FR Doc. 2016–26780 Filed 11–4–16; 8:45 am] Technologies Corp., 1001 Airbrake Avenue, for the sale of freight car brake system BILLING CODE 7020–02–P Wilmerding, PA 15148, Faiveley Transport components. S.A., Le Delage Building, Hall Parc— 3. Wabtec’s proposed acquisition of Baˆ timent 6A, 6e`me e´tage, 3, rue du 19 mars Faiveley would eliminate head-to-head 1962, 92230 Gennevilliers, CEDEX—France competition in the development, DEPARTMENT OF JUSTICE and Faiveley Transport North America, 50 manufacture, and sale of several Beachtree Boulevard, Greenville, SC 29605, Antitrust Division components of freight car brake systems Defendants. in the United States. The proposed Case No.: 1:16-cv-02147 United States v. Westinghouse Air Judge: Tanya S. Chutkan acquisition likely would give Wabtec Brake Technologies Corp., Proposed Filed: 10/26/2016 the incentive and ability to raise prices Final Judgment and Competitive or decrease the quality of service Complaint Impact Statement provided to customers in the railroad The United States of America, acting freight industry. The proposed Notice is hereby given pursuant to the under the direction of the Attorney acquisition also would eliminate future Antitrust Procedures and Penalties Act, General of the United States, brings this competition for control valves, the most 15 U.S.C. 16(b)–(h), that a proposed civil antitrust action to enjoin the safety-critical component on a freight Final Judgment, Hold Separate proposed acquisition of Faiveley car. If approved, the proposed Stipulation and Order, and Competitive Transport S.A. and Faiveley Transport acquisition would eliminate the entry of Impact Statement have been filed with North America (collectively, ‘‘Faiveley’’) Faiveley into this market, thus the United States District Court for the by Westinghouse Air Brake maintaining a century-old duopoly District of Columbia in United States of Technologies Corporation (‘‘Wabtec’’) between Wabtec and its only other America v. Westinghouse Air Brake and to obtain other equitable relief. The control valve rival, and reducing the Technologies Corp. et al., Civil Action United Sates alleges as follows: two incumbent control valve suppliers’ No. 1:16-cv-02147. On October 26, 2016, incentive to compete. the United States filed a Complaint I. Introduction 4. Accordingly, the proposed alleging that Westinghouse Air Brake 1. Wabtec proposes to acquire acquisition likely would substantially Technologies Corp.’s (‘‘Wabtec’’) Faiveley, a global provider of railway lessen existing and future competition

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in the development, manufacture, and socie´te´ anonyme based in Gennevilliers, the safety and performance of a freight sale of freight car brake system France. train. components in the United States in 10. On July 27, 2015, Wabtec entered B. Railroad Freight Industry Regulation violation of Section 7 of the Clayton into an Exclusivity Agreement with Act, 15 U.S.C. 18, and should be Faiveley whereby it made an irrevocable 14. Freight cars often must travel over enjoined. offer to acquire Faiveley, for cash and multiple railroads’ trackage in order to stock totaling approximately $1.8 deliver commodities throughout the II. Jurisdiction and Venue billion, including assumed debt. The United States. Traveling over multiple 5. The United States brings this action proposed acquisition would create the lines requires freight car equipment to pursuant to Section 15 of the Clayton world’s largest rail equipment supplier be mechanically interoperable and meet Act, as amended, 15 U.S.C. 25, to with expected revenue of approximately performance standards for certain types prevent and restrain the defendants $4.5 billion per year and a presence in of rail equipment. In order for the brake from violating Section 7 of the Clayton every key rail market in the world. systems on individual freight cars to Act, 15 U.S.C. 18. work together properly, freight car brake 6. Defendants manufacture and sell IV. Trade and Commerce systems must be comprised of industry- components of freight car brake systems A. Industry Overview approved components and meet critical throughout the United States. They are performance standards. engaged in a regular, continuous, and 11. Rail freight transport is the use of 15. The Federal Railroad substantial flow of interstate commerce, railroads and freight trains to transport Administration of the U.S. Department and their activities in the development, cargo. A freight train is a group of of Transportation establishes strict manufacture, and sale of rail equipment freight cars hauled by one or more standards to ensure interoperability of have had a substantial effect upon locomotives on a railway. A typical freight cars in use within the U.S. interstate commerce. The Court has freight locomotive can haul as many as freight rail network. These standards subject-matter jurisdiction over this 25 to 100 freight cars. require that certain freight car action pursuant to Section 15 of the 12. The railroad freight industry plays components achieve common Clayton Act, 15 U.S.C. 25, and 28 U.S.C. a significant role in the U.S. economy, performance and interoperability 1331, 1337(a), and 1345. hauling key commodities such as energy standards. For certain freight rail 7. Venue is proper in this District products, automobiles, construction equipment, including freight car brake under Section 12 of the Clayton Act, 15 materials, chemicals, coal, petroleum, systems, the AAR is responsible for U.S.C. 22 and 28 U.S.C. 1391(c). equipment, food, metals, and minerals. setting technical and performance Defendants have consented to venue The U.S. freight rail network accounts standards. The AAR is a policy- and and personal jurisdiction in the District for approximately 40 percent of the standard-setting organization comprised of Columbia. distance all freight shipments of of full, affiliate, and associate members. commodity goods travel in the United Full members include the Class I III. Defendants and the Proposed States. The U.S. freight rail network is railroads. Affiliate and associate Acquisition one of the most developed rail networks members include rail equipment 8. Wabtec is a Delaware corporation in the world and it supports suppliers and freight car owners. headquartered in Wilmerding, approximately $60 billion in railroad 16. AAR’s functions include technical Pennsylvania. It is one of the world’s freight shipments each year. This freight and mechanical standard setting for largest providers of rail equipment and network consists of 140,000 miles of freight rail equipment. The AAR services with global sales of $3.3 billion trackage owned and operated by seven manages fifteen technical committees in 2015. Wabtec makes and sells rail Class I Railroads (as identified by the comprised of select employees of full, equipment, including braking U.S. Department of Transportation), 21 affiliate, and associate members. These equipment, for a variety of different end regional railroads, and 510 local committees write technical and uses, including the railroad freight railroads. performance standards for components industry. In 2015, Wabtec’s annual 13. Railroads and freight car leasing used on freight trains. They also worldwide sales of freight rail companies purchase new freight cars approve products for use within the equipment were approximately $2 from car builders. Car builders build the U.S. freight rail network. Thus, a billion. body of the freight car and are component manufacturer like Wabtec or 9. Faiveley Transport North America responsible for sourcing and integrating Faiveley must have AAR approval for is a New York corporation all of the components needed for the many significant components of a headquartered in Greenville, South various sub-systems required to freight train before its products can be Carolina. Faiveley makes and sells rail assemble a functioning freight car. The used in the United States. The length equipment, including braking most important sub-system is the safety and difficulty of the AAR-approval equipment, for a variety of end uses to critical brake system. Manufacturers of process depends on the nature and customers in 24 countries, including the brake systems and brake system function of the train component. Brake United States. In particular, it components sell their components and components face some of the lengthiest manufactures products used in freight systems to car builders for new freight and most rigorous testing and approval rail applications. During the fiscal year cars and directly to railroads and leasing processes because brakes are safety- beginning April 1, 2015 and ending companies for aftermarket maintenance critical components that must be fail- March 31, 2016, Faiveley had global of cars. Railroads and freight car leasing safe. The Brake Systems Committee of sales of approximately Ö1.1 billion, with companies collectively purchase and the AAR oversees the review and approximately $174 million of revenue maintain approximately 1.5 million performance testing of brake equipment in the United States. Faiveley has freight cars utilized throughout the U.S. and it awards incremental approvals manufacturing facilities in Europe, Asia, freight rail network. Freight railroads in over time before a component can earn and North America, including six U.S. the United States spend over $20 billion unconditional approval. locations. Faiveley Transport North annually to acquire new freight cars and 17. Freight car owners and operators America is a wholly-owned subsidiary maintain existing freight car fleets. view AAR approval as a critical of defendant Faiveley Transport S.A., a Freight car maintenance is critical for certification. Industry participants view

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AAR approval as a high barrier to V. Relevant Markets 25. In the U.S. market for the selling freight car brake systems and 21. Defendants compete across a range development, manufacture, and sale of components in the United States. of freight car brake system components, freight car hand brakes, the pre- many of which require AAR approval. acquisition HHI is 3,500. The post- C. Freight Car Brake Equipment acquisition HHI would be in excess of Purchases Each product described below constitutes a line of commerce under 5,000, with an increase in HHI in excess 18. On average, there are expected to Section 7 of the Clayton Act, 15 U.S.C. of 1,500. Thus, this market is highly be approximately 75,000 new freight car 18, and each is a relevant product concentrated and would become builds per year in the United States. market in which competitive effects can significantly more concentrated as a Demand for new cars is tied to be assessed. They are recognized in the result of the proposed acquisition. macroeconomic conditions, including railroad freight industry as separate B. Relevant Market 2: Slack Adjusters demand for the commodities that freight product lines, they have unique cars carry. In recent years demand for characteristics and uses, they have 26. A slack adjuster is a freight cars has ranged from customers that rely specifically on these pneumatically-driven ‘‘arm’’ that approximately 63,000 to 81,000 new car products, they are distinctly priced, and applies pressure to the brake shoe (a builds per year. Railroads and freight they have specialized vendors. friction material) in order to change the car leasing companies typically issue 22. Mergers and acquisitions that brake shoe’s position relative to the requests for proposals to freight car reduce the number of competitors in train’s wheel. As the brake shoe wears builders who compete to provide already concentrated markets are more down, this adjustment in position complete freight cars built to likely to substantially lessen maintains the brake systems’ ability to specification. Freight car builders competition. Concentration can be apply the correct amount of braking source sub-systems and components measured in various ways, including by force by ensuring the brake shoe is from suppliers, like Wabtec and market shares and by the widely-used applied appropriately to the wheel to Faiveley. Where a product must be AAR Herfindahl-Hirschman Index (‘‘HHI’’). achieve optimal braking capability. approved, car builders must source it See Appendix. Under the Horizontal 27. Combined, Wabtec and Faiveley from an AAR-approved supplier of that Merger Guidelines, post-acquisition have approximately 76 percent of this product. For certain components of a HHIs above 2500 and changes in HHI market based on quantity sold. Their freight car brake system, Wabtec and above 200 trigger a presumption that a only significant competitor has a market Faiveley are two of the only three AAR- proposed acquisition is likely to share of approximately 24 percent, approved suppliers. enhance market power and substantially thereby making the proposed lessen competition in a defined market. 19. New freight car procurements acquisition a virtual merger-to-duopoly Given the high pre- and post-acquisition typically include performance in the market for the development, concentration levels in the relevant specifications identified by customers. manufacture, and sale of slack adjusters. markets described below, Wabtec’s Freight car builders use these The proposed acquisition threatens to proposed acquisition of Faiveley specifications to source and price further concentrate this market, as presumptively violates Section 7 of the particular components for the evidenced by the pre- and post-merger Clayton Act. In almost all of these procurement. Inclusion in new car HHIs. The post-acquisition HHI would markets, customers would face a procurements also becomes a source for be approximately 6,300, reflecting an duopoly after the acquisition. long-term revenues for component increase of approximately 2,800 as a suppliers. Incumbent suppliers for A. Relevant Market 1: Hand Brakes result of the acquisition. many freight car brake system 23. A hand brake is a manual wheel C. Relevant Market 3: Truck-Mounted components enjoy an advantage in the located at the end of a freight car that, Brake Assemblies aftermarket. Although components are when turned, can engage a freight car’s technically interoperable, changing brake system without using pneumatic 28. Freight car braking equipment is suppliers often introduces at least some or hydraulic pressure. It is a secondary often mounted under the bogie (e.g., switching costs and increased risk of means to prevent a freight car from car), thereby serving as the foundation failure for end-use customers. Thus, moving, for example, during for the wheels. Truck-mounted brake competitiveness for original equipment maintenance or when being connected assemblies (‘‘TMBs’’), however, are an sales is critical. to a new locomotive. approach to mounting the brakes on 20. Customers can purchase freight 24. The market for the development, freight car designs for which body- car brake equipment on a component- manufacture, and sale of freight car mounted brakes are not suitable. TMBs by-component basis. However, a large hand brakes is already concentrated. are free standing equipment that do not rail equipment supplier will typically Wabtec and Faiveley together hold require additional rigging and so are offer better pricing to customers who approximately 60 percent of this market significantly lighter than their bogie purchase multiple freight car brake based on the quantity of hand brakes counterparts. They are commonly used system components together as a sold. Their only significant competitor for special lightweight or low profile bundle. For example, rail equipment holds most of the remaining share of the freight car designs. suppliers will offer more competitive hand brakes market. A fourth, marginal 29. Post-acquisition, the market for pricing to customers who purchase all competitor sells a negligible quantity of the development, manufacture, and sale the components for an entire freight car hand brakes each year. Further, this of TMBs would be highly concentrated. brake system rather than piecemeal competitor does not manufacture any Combined, Wabtec and Faiveley have purchases of certain components. other significant components of a freight approximately a 96 percent share of the Because product bundles may span car brake system nor is it likely to begin market based on quantity sold. The multiple systems on a freight train, doing so in the foreseeable future. Thus, post-acquisition HHI of the merged firm suppliers with broad offerings often it is unlikely to replace the competition would be approximately 9,200, with an have a competitive advantage over niche that would be lost as a result of the increase of approximately 3,600 suppliers. proposed acquisition. resulting from the acquisition.

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D. Relevant Market 4: Empty Load 36. The market for the development, into the relevant market may be located Devices manufacture, and sale of control valves outside the geographic market. In 30. Empty load devices are is characterized by a century-old addition, before suppliers can sell incorporated into every freight car and duopoly between Wabtec and another components of freight car brake systems detect when a freight car is empty. The manufacturer. Over the past five years, in the United States, they must first get empty load device relays this Wabtec had approximately 40 percent of AAR approval. The AAR’s regulatory information to the brake system control the U.S. control valve market and its authority requires products be certified board, which is then able to reduce the rival had the other 60 percent of the for interoperability within the U.S. amount of braking force applied to the market. freight rail network. Because these brakes on a freight car that is empty so 37. On June 29, 2016, Faiveley products are certified for use and sale that it decelerates in concert with the obtained conditional approval from the anywhere in the United States, the remainder of the freight cars in tow. AAR to sell a control valve. In doing so, regulatory framework determines which 31. Post acquisition, the market for it disrupted the duopoly by becoming firms can supply the U.S. customer the development, manufacture, and sale the first firm in over 25 years and only base, which supports a United States of empty load devices would be highly the second firm in the last 50 years to geographic market. Furthermore, concentrated. Combined, Wabtec and develop a control valve and make suppliers of freight car brake systems Faiveley have a 60 percent share of the substantial progress through the and components typically deliver their market based on quantity sold. The industry’s formidable testing and products and services to customers’ post-acquisition HHI of the merged firm approval process for freight car control locations and are able to price would be approximately 5,100, with an valves. Thus, the proposed acquisition discriminate based on those locations. increase of approximately 1,700 would eliminate a third potential 40. In addition, a small but significant resulting from the acquisition. supplier of control valves, and continue increase in price of each of the foregoing a longstanding duopoly for the E. Relevant Market 5: Brake Cylinders components of a freight car brake foreseeable future. system sold into the United States 38. Working closely with the control 32. A brake cylinder is a component would not cause a sufficient number of valve are its complementary valves: The of a freight car brake system that U.S. customers to turn to providers of dirt collector, angle cock, and vent valve converts compressed air into freight brake components sold into other (collectively, ‘‘co-valves’’). A dirt mechanical force to apply the brake countries because those products lack collector is a ball style cut-out-cock with shoe to the wheel in order to decelerate AAR approval and interoperability with a dirt chamber that is installed adjacent or stop the train. U.S. freight rail networks. Accordingly, to the control valve. It allows for 33. Post-acquisition, the market for the United States is a relevant the development, manufacture, and sale impurities in the air compressor to be filtered out to keep the air lines feeding geographic market within the meaning of brake cylinders would be highly of Section 7 of the Clayton Act. concentrated. Combined, Wabtec and the braking system clear of obstructions Faiveley have approximately a 41 that would reduce air pressure. An VI. Anticompetitive Effects angle cock is placed at the end of the percent share of the market based on 41. Wabtec and Faiveley presently quantity sold. The post-acquisition HHI brake pipe and provides a means for closing the brake pipe at the end of the compete in the development, of the merged firm would be manufacture, and sale of many approximately 5,100 with an increase of freight car. A vent valve is a device on components of a freight car brake approximately 800 resulting from the a freight car that reacts to a rapid drop system, including hand brakes, slack acquisition. in brake pipe pressure and is used to exhaust air from the brake pipe during adjusters, empty load devices, TMBs F. Relevant Market 6: Control Valve and emergency brake applications. For new and brake cylinders. The defendants’ Co-Valves freight car builds, sales of co-valves combined shares in each of these 34. Modern trains rely upon a fail-safe correlate with the sale of the control markets range from approximately 41 to air (or pneumatic) brake system that valve. Customers have a preference for 96 percent. Therefore, the unilateral uses changes in air pressure to signal purchasing co-valves and control valves competitive effects of the proposed each freight car to release its brakes. A from the same supplier, to which they acquisition are presumptively harmful reduction or loss of air pressure applies return for replacement parts in the in these product markets under the the brakes using the compressed air in aftermarket. While Faiveley currently Horizontal Merger Guidelines. The the air reservoir. An increase in air has insignificant sales of angle cocks, proposed acquisition likely will result pressure decreases the braking force vent valves, and dirt collectors, it is an in unilateral effects that substantially applied until it is released. The control AAR-approved supplier of these lessen competition in the markets for valve, often described as the brain of a products. hand brakes, load detection devices, freight car’s brake system, regulates the slack adjusters, TMBs, and brake flow of air to engage or disengage the G. Geographic Market cylinders, respectively. brakes. 39. Based on customer location and 42. In each of the foregoing relevant 35. A control valve is the most highly- the governing regulatory framework, the markets, Wabtec and Faiveley presently engineered, technologically- United States is the relevant geographic compete against each other and only sophisticated component in a freight car market for the development, one other large competitor. Prices and brake system. Without it, a supplier manufacture, and sale of freight brake other terms of trade are usually cannot offer a complete freight car brake components. Wabtec and Faiveley determined by negotiations between system. The development of a control compete with each other for customers suppliers and customers. Products are valve also requires significant located throughout the United States. not highly differentiated by function or development time and financial When a geographic market is defined performance, and price is the primary resources. In addition, it faces one of the based on the location of customers, customer consideration given that railroad freight industry’s lengthiest and competitors in the market are firms that performance is presumed after approval most rigorous testing and approval sell to customers in the specified region by the industry’s standard-setting body, processes. even though some suppliers that sell the AAR.

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43. A merger between two competing harmful effects of the proposed Assistant Chief, Litigation II Section sellers reduces the ability of buyers to acquisition. Antitrust Division negotiate better contract terms, 48. The likelihood of another Doha Mekki* including price, by leveraging potential entrant in the control valve James K. Foster, Jr. competing offers. The loss of customer market is even more remote given the Erin C. Grace negotiating power can significantly historical dearth of meaningful attempts Daniel J. Monahan Suzanne Morris enhance the ability and incentive of the to enter this market, as well as the Trial Attorneys merged entity to offer less competitive substantial time and cost associated terms. Customers likely derive United States Department of Justice with entry into the control valve market. Antitrust Division, Litigation II Section significant benefits from having VIII. Violation Alleged 450 Fifth Street NW., Suite 8700 Faiveley in the market today, as Washington, DC 20530 reflected by its substantial market shares 49. The acquisition of Faiveley by Telephone: (202) 598–8023 in the relevant freight brake components Wabtec likely would substantially Facsimile: (202) 514–9033 identified above. The resulting loss of a lessen competition in each of the [email protected] competitor and increased concentration relevant markets in violation of Section *LEAD ATTORNEY TO BE NOTICED of market share indicate that the 7 of the Clayton Act, 15 U.S.C. 18. acquisition likely will result in 50. Unless enjoined, the acquisition Appendix significant harm from expected price likely would have the following Herfindahl-Hirschman Index increases and decreases in quality of anticompetitive effects, among others: The Herfindahl-Hirschman Index (‘‘HHI’’) service. (a) Actual and potential competition is a commonly accepted measure of market 44. When the proposed acquisition between Wabtec and Faiveley in the concentration. The HHI is calculated by was announced, Wabtec and a second relevant markets would be eliminated; squaring the market share of each firm manufacturer were the only AAR- (b) competition generally in the competing in the relevant market and then approved suppliers of control valves, a relevant markets would be eliminated; summing the resulting numbers. For duopolistic market they had shared for and example, for a market consisting of four firms over a century. with shares of 30, 30, 20, and 20 percent, the (c) prices and commercial terms for HHI is 2,600 (302 + 302 + 202 + 202 = 2,600). 45. As the second-largest railway the relevant products would be less brake manufacturer in the world, The HHI takes into account the relative size favorable, and quality and service distribution of the firms in a market. It Faiveley was uniquely positioned to relating to these products likely would approaches zero when a market is occupied enter the control valve market. Faiveley decline. by a large number of firms of relatively equal had developed a control valve prototype size, and reaches its maximum of 10,000 that it intended to shepherd through the IX. Request for Relief points when a market is controlled by a AAR’s control valve testing and 51. The United States requests that single firm. The HHI increases both as the approval process. If successful, it would this Court: number of firms in the market decreases and have become a third control valve (a) Adjudge and decree Wabtec’s as the disparity in size between those firms increases. supplier. But for the merger, Faiveley proposed acquisition of Faiveley to be likely would have entered the control unlawful and in violation of Section 7 United States District Court for the valve market, thereby invigorating of the Clayton Act, 15 U.S.C. 18; District of Columbia competition between Wabtec and its (b) preliminarily and permanently United States Of America, Plaintiff, v. only competitor in the control valve enjoin and restrain defendants and all market. The entry of a third supplier of Westinghouse Air Brake Technologies Corp., persons acting on their behalf from Faiveley Transport S.A., and Faiveley control valves likely would increase consummating Wabtec’s proposed Transport North America, Defendants. competition and allow customers to acquisition or from entering into or Case No.: 1:16–cv–02147 negotiate better prices and terms. carrying out any contract, agreement, Judge: Tanya S. Chutkan 46. Faiveley’s entry into the control plan, or understanding, the effect of Filed: 10/26/2016 valve market would pose an immediate which would be to combine Faiveley Competitive Impact Statement threat to the incumbent suppliers, with the operations of Wabtec; forcing them to compete aggressively or (c) award the United States its costs Plaintiff United States of America risk losing a sale to Faiveley. Faiveley’s of this action; and (‘‘United States’’), pursuant to Section customers anticipate it would offer price (d) award the United States such other 2(b) of the Antitrust Procedures and competition in order to gain quick relief as the Court deems just and Penalties Act (‘‘APPA’’ or ‘‘Tunney acceptance of its control valve. As a proper. Act’’), 15 U.S.C. 16(b)-(h), files this result, Faiveley likely would have had Competitive Impact Statement relating a substantial impact on pricing, service Dated: October 26, 2016 to the proposed Final Judgment and other commercial terms offered by Respectfully submitted, submitted for entry in this civil antitrust the incumbent suppliers, even with a FOR PLAINTIFF UNITED STATES: proceeding. small initial share of actual sales. Renata B. Hesse (DC Bar #466107) I. Nature and Purpose of the Proceeding Therefore, the proposed acquisition is Acting Assistant Attorney General likely to result in anticompetitive Antitrust Division On July 27, 2015, Defendant unilateral effects in the market for Sonia K. Pfaffenroth Westinghouse Air Brake Technologies control valves. Deputy Assistant Attorney General Corp. (‘‘Wabtec’’) and Defendants Antitrust Division Faiveley Transport S.A. and Faiveley VII. Entry Patricia A. Brink Transport North America (‘‘Faiveley’’) 47. Given the substantial time Director of Civil Enforcement entered into an Exclusivity Agreement required to develop and qualify a Antitrust Division pursuant to which Wabtec made an component of a freight car brake system, Maribeth Petrizzi (DC Bar #435204) irrevocable offer to acquire Faiveley for timely and sufficient entry by other Chief, Litigation II Section cash and stock totaling approximately competitors into any of the relevant Antitrust Division $1.8 billion, including assumed debt. markets is unlikely to mitigate the Stephanie A. Fleming The United States filed a civil antitrust

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Complaint on October 26, 2016, seeking makes and sells rail equipment, Final Judgment filed by the United to enjoin the proposed acquisition. The including braking equipment, for a States on October 26, 2016. Complaint alleges that the acquisition variety of different end-uses, including B. Background on Freight Car Brake likely would lessen competition the railroad freight industry. Wabtec’s Equipment Purchases substantially for the development, annual global sales of freight rail manufacture, and sale of various equipment totaled approximately $2 Rail freight transport is the use of railroad freight car brake components billion in 2015. railroads and freight trains to transport including hand brakes, slack adjusters, Faiveley Transport S.A. is a socie´te´ cargo. The railroad freight industry truck-mounted brake assemblies, empty anonyme based in Gennevilliers, plays a significant role in the U.S. load devices, brake cylinders, and brake France. Faiveley makes and sells rail economy, hauling key commodities control valves in the United States in equipment, including braking such as energy products, automobiles, violation of Section 7 of the Clayton equipment, for a variety of end uses to construction materials, chemicals, coal, Act, 15 U.S.C. 18. This loss of customers in 24 countries, including the petroleum, equipment, food, metals, and competition likely would result in United States. In particular, it minerals. The U.S. freight rail network significant harm from expected price manufactures products used in freight accounts for approximately 40 percent increases and decreases in quality of rail applications. During the fiscal year of the distance all freight shipments of service by the incumbent suppliers in beginning April 1, 2015 and ending commodity goods travel in the United the markets for those products. March 31, 2016, Faiveley had global States. The U.S. freight rail network is At the same time the Complaint was sales of approximately Ö1.1 billion, with one of the most developed rail networks filed, the United States filed a Hold approximately $174 million of revenue in the world and it supports Separate Stipulation and Order and a in the United States. Faiveley has approximately $60 billion in railroad proposed Final Judgment, which are manufacturing facilities in Europe, Asia, freight shipments each year. This freight designed to eliminate the and North America, including six U.S. network consists of 140,000 miles of anticompetitive effects of the locations. trackage owned and operated by seven acquisition. Under the proposed Final Faiveley Transport North America is Class I Railroads, 21 regional railroads, Judgment, which is explained more a wholly-owned subsidiary of Faiveley and 510 local railroads. fully below, Defendants are required to Transport S.A. It is a New York In order to deliver commodities divest Faiveley’s entire U.S. freight car Corporation headquartered in throughout the United States, freight cars often must travel over multiple brakes business, including all assets Greenville, South Carolina. It is the sole railroads’ trackage. Traveling over relating to Faiveley’s freight car brake business unit of Faiveley that is multiple lines requires freight car control valve development project responsible for the development, equipment to be mechanically (known as the FTEN) to a named buyer, manufacture, and sale of freight car interoperable and meet common Amsted Rail Company, Inc. (‘‘Amsted’’). brake components in the United States. In 2010, Faiveley entered into a joint performance standards for certain types These assets collectively are referred to venture with Amsted, a rail equipment of rail equipment. In order for the brake as the ‘‘Divestiture Assets.’’ Under the supplier based in Chicago, Illinois, to systems on individual freight cars to terms of the Hold Separate Stipulation form Amsted Rail Faiveley, LLC work together properly, freight car brake and Order, Defendants will take certain (‘‘ARF’’). Faiveley owns 67.5 percent of systems must be comprised of industry- steps to ensure that the Divesture Assets ARF and Amsted owns the remaining approved components and meet critical are operated as a competitively 32.5 percent. As part of the joint performance standards. For certain independent, economically viable and venture, all of the freight car brake freight rail equipment, including freight ongoing business concern, that the components that are manufactured by car brake systems, the Association of Divestiture Assets will remain Faiveley currently are marketed and American Railroads (‘‘AAR’’) is independent and uninfluenced by the sold to customers by Amsted. Critically, responsible for setting technical and consummation of the acquisition; and the joint venture allows Faiveley to performance standards. The AAR is a that competition is maintained during bundle brake components with policy- and standard-setting the pendency of the ordered divestiture. Amsted’s other products such as wheels organization comprised of full, affiliate, The United States and Defendants and axles, thereby increasing its ability and associate members. Full members have stipulated that the proposed Final to compete for the sale of freight car include the Class I railroads. Affiliate Judgment may be entered after brake components against Wabtec. and associate members include rail compliance with the APPA. Entry of the On July 27, 2015, Wabtec and equipment suppliers and freight car proposed Final Judgment would Faiveley entered into an Exclusivity owners. terminate this action, except that the Agreement whereby Wabtec would AAR’s functions include technical Court would retain jurisdiction to acquire Faiveley for cash and stock and mechanical standard setting for construe, modify, or enforce the totaling approximately $1.8 billion, freight rail equipment. The AAR provisions of the proposed Final including assumed debt. The proposed manages fifteen technical committees Judgment and to punish violations acquisition would create the world’s that write technical and performance thereof. largest rail equipment supplier with standards for all components used on II. Description of the Events Giving Rise expected revenue of approximately $4.5 freight trains and approve products for to the Alleged Violation billion per year and a presence in every use. Thus, a component manufacturer key rail market in the world. As part of must have AAR approval for brake A. The Defendants and the Proposed that acquisition, Wabtec proposed to components before they can be used. Transaction acquire all of Faiveley’s freight car Brake components face some of the Wabtec is a Delaware corporation brakes business in the United States, lengthiest and most rigorous testing and headquartered in Wilmerding, including its interest in the ARF joint approval processes because brakes are Pennsylvania. It is one of the world’s venture and Faiveley’s FTEN freight car safety-critical components that must be largest providers of rail equipment and brake control valve now being fail-safe. The Brake Systems Committee services with global sales of $3.3 billion developed. This acquisition is the of the AAR oversees the review and in 2015. In the United States, Wabtec subject of the Complaint and proposed performance tests of braking equipment

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and it awards incremental approvals characteristics and uses, they have cars in tow. A brake cylinder is a over time before a component can earn customers that rely specifically on these component of a freight car brake system unconditional approval. Freight car products, they are distinctly priced, and that converts compressed air into owners and operators view AAR they have specialized vendors. mechanical force to apply the brake approval as a critical certification. Competition would likely be lessened shoe to the wheel in order to stop or Industry participants view AAR with respect to those components as a slow the train. approval as a high barrier to selling result of the proposed acquisition 2. U.S. Market for Freight Brake Control freight car brake systems and because there would be one fewer Valves and Co-Valves components in the United States. substantial equipment manufacturer in Railroads and freight car leasing each of these highly concentrated The Complaint also alleges likely companies collectively spend over $20 markets. For purchasers of components harm in a distinct product market for billion annually to obtain new freight of freight car brake components, Wabtec freight car brake control valves and the cars and to maintain approximately 1.5 and Faiveley are two of the top three associated co-valves that are typically million freight cars utilized throughout suppliers, with combined market shares sold with them. The control valve, often the United States. On average, there are of approximately 41 to 96 percent for described as the brain of a freight car’s expected to be approximately 75,000 the products in which they compete. brake system, regulates the flow of air to new freight car builds per year in the Faiveley is expected to be an even engage or disengage the brakes. A United States, and demand for new cars stronger competitor after full control valve is the most highly- is tied to macroeconomic conditions, commercialization of the FTEN. engineered, technologically- including demand for the commodities sophisticated component in a freight car these freight cars carry. In recent years, 1. U.S. Markets for Hand Brakes, Slack brake system. Without it, a supplier demand for freight cars has ranged from Adjusters, Truck-Mounted Brake cannot offer a complete freight car brake approximately 63,000 to 81,000 new car Assemblies, Empty Load Devices, and system. The development of a control builds. Railroads and freight car leasing Brake Cylinders valve also requires significant companies typically issue requests for The Complaint alleges likely harm in development time and financial proposals to freight car builders who five distinct product markets for freight resources. In addition, it faces one of the compete to provide complete freight car brake components that Faiveley railroad freight industry’s lengthiest and cars built to specification. Freight car currently sells under and through the most rigorous testing and approval builders source sub-systems and ARF joint venture: Hand brakes, slack processes. This results in extremely components from suppliers like, Wabtec adjusters, truck-mounted brake high entry barriers for this market. and Faiveley. Where a product must be assemblies (‘‘TMBs’’), empty load Working closely with the control AAR approved, car builders must source devices, and brake cylinders. A hand valve are its complementary valves: The it from an AAR-approved supplier of brake is a manual wheel located at the dirt collector, angle cock, and vent valve that product. For certain components of end of a freight car that, when turned, (collectively, ‘‘co-valves’’). A dirt a freight car brake system, Wabtec and can engage a freight car’s brakes system collector is a ball style cut-out-cock with Faiveley are two of the only three AAR- without using pneumatic or hydraulic a dirt chamber that is installed adjacent approved suppliers of the product. pressure. It is a secondary means to to the control valve. It allows for New freight car procurements prevent a freight car from moving, for impurities in the air compressor to be typically include performance example, during maintenance or when filtered out to keep the air lines feeding specifications identified by customers. being connected to a new locomotive. A the braking system clear of obstructions Freight car builders use these slack adjuster is a pneumatically-driven that would reduce air pressure. An specifications to source and price ‘‘arm’’ that applies pressure to the brake angle cock is placed at the end of the particular components for the shoe (a friction material) in order to brake pipe and provides a means for procurement. Inclusion in new car change the brake shoe’s position relative closing the brake pipe at the end of the procurements also becomes a source for to the train’s wheel. As the brake shoe freight car. A vent valve is a device on long-term revenues for component wears down, this adjustment in position a freight car that reacts to a rapid drop suppliers. Incumbent suppliers for maintains the brake systems’ ability to in brake pipe pressure and is used to many freight car brake system apply the correct amount of braking exhaust air from the brake pipe during components enjoy an advantage in the force by ensuring the brake shoe is emergency brake applications. These co- aftermarket. Although components are applied appropriately to the wheel to valves are an essential part of the technically interoperable, changing achieve optimal braking capability. development, manufacture, and sale of suppliers often introduces switching TMBs are an approach to mounting control valves, and for new freight car costs and increased risk of failure for brakes on freight car designs for which builds, sales of co-valves correlate with end-use customers. Thus, body-mounted brakes are not suitable. the sale of the control valve. competitiveness for original equipment TMBs are free-standing equipment that The market for the development, sales is critical. do not require additional rigging and so manufacture, and sale of control valves are significantly lighter than body- is characterized by a century-old C. Relevant Markets Affected by the mounted brakes. They are commonly duopoly between Wabtec and another Proposed Acquisition used for special lightweight or low manufacturer. Over the past five years, Defendants compete across a range of profile freight car designs. Empty load Wabtec had approximately 40 percent of freight car brake system components devices are incorporated into every the U.S. control valve market and its that require AAR approval. The freight car and detect when a freight car rival had the other 60 percent of the Complaint alleges that each of these is empty. The empty load device relays market. brake system components is a relevant this information to the brake system On June 29, 2016, after a lengthy and product market in which competitive control board, which is then able to expensive development process, effects can be assessed. The different reduce the amount of braking force Faiveley obtained conditional approval components are recognized in the applied to the brakes on a freight car from the AAR to sell its control valve. railroad freight industry as separate that is empty so that it decelerates in In doing so, it become the first firm in product lines, they have unique concert with the remainder of the freight over 25 years and only the second in the

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last 50 years to develop a control valve devices, and brake cylinders, and quick acceptance of its control valve. and make substantial progress through because these markets are highly Over the long term, the existence of the industry’s formidable testing and concentrated and subject to high entry Faiveley as a third supplier would have approval process. Faiveley has built the barriers, unilateral anticompetitive continued to enhance competition. first 200 units and satisfactorily effects would be likely to result from the Without the required divestiture of completed all AAR laboratory tests. It acquisition. In each of the foregoing assets, Wabtec’s acquisition of Faiveley projects sales of a few thousand units relevant markets, Wabtec and Faiveley would have eliminated important head- over the next few years as it works with presently compete against each other to-head competition in the railroads to continue to test and and another large competitor in a development, manufacture, and sale of demonstrate the FTEN in various bargaining format where products are freight car brake components and likely functional environments. Full not highly differentiated by function or would have given Wabtec the incentive commercialization and unconditional performance and price is the primary and ability to raise prices and decrease AAR approval is expected within seven customer consideration, given that the quality of service provided to the years. performance is presumed after approval railroad freight car industry. Absent the by the industry’s standard-setting body, required divestiture of assets, the D. Geographic Market the AAR. Given the nature and the acquisition also would have eliminated As alleged in the Complaint, the extent of this competition, a merger a third potential supplier of control United States is the relevant geographic between two competing sellers would valves, thereby freezing in place a market for the development, remove a buyer’s ability to negotiate longstanding duopoly in that market. manufacture, and sale of freight brake these sellers against each other. The loss F. Barriers to Entry components. Wabtec and Faiveley of this bargaining competition can compete with each other for customers significantly enhance the ability and Given the substantial time required to located throughout the United States. incentive of the merged entity to obtain develop and qualify a component of a When a geographic market is defined a result more favorable to it and less freight car brake system, timely and based on the location of customers, favorable to the buyer than the merging sufficient entry by other competitors competitors in the market are firms that firms would have obtained separately, into any of the relevant markets, is sell to customers in the specified region, absent the merger. As its substantial unlikely to mitigate the harmful effects even though some suppliers that sell market shares attest, customers derive of the proposed acquisition. The into the relevant market may be located significant benefits from having likelihood of another potential entrant outside the geographic market. Before Faiveley in the market today. The in the control valve market is suppliers can sell components of freight resulting loss of a competitor and particularly remote given the historical car brake systems in the United States, increased concentration of market share dearth of meaningful attempts to enter they must receive AAR approval. The indicate that the acquisition likely will this market, as well as the substantial AAR’s regulatory authority requires result in significant harm from expected time and cost associated with entry into products be certified for interoperability price increases and decreases in quality the control valve market. within the U.S. freight rail network. of service if the proposed acquisition is III. Explanation of the Proposed Final Because these products are certified for consummated. Judgment use and sale anywhere in the United 2. Freight Car Control Valves and Co- The divestitures required by the States, the regulatory framework Valves proposed Final Judgment will eliminate determines which firms can supply the Wabtec and a second manufacturer the anticompetitive effects of the U.S. customer base, which supports a acquisition in the relevant markets by United States geographic market. are now the only unconditionally approved suppliers of freight car brake establishing a new, independent, and Furthermore, suppliers of freight car economically viable competitor in the brake systems and components typically control valves. As the second-largest railway brake manufacturer in the development, manufacture, and sale of deliver their products and services to world, Faiveley was uniquely freight car brake components by quickly customers’ locations and are able to positioned to enter this market because transferring full ownership of the ARF price discriminate based on customers’ of both its general competency and the joint venture to Amsted. It is also locations. substantial progress it has already made expected to eliminate the In addition, a small but significant in developing the product. Absent the anticompetitive effects of the increase in price of each of the foregoing merger it would have become the only acquisition from the loss of competition components of a freight car brake other freight car brake control valve in the development, manufacture, and system sold into the United States supplier. sale of brake control valves by would not cause a sufficient number of The proposed acquisition would transferring to Amsted all assets relating U.S. customers to turn to providers of eliminate future competition for the to the FTEN control valve project, freight brake components sold into other development, manufacture, and sale of including the FTEN valve itself, as well countries because those products lack control valves by eliminating Faiveley’s as dirt collectors, angle cocks, and vent AAR approval and interoperability with entry into this market. Faiveley’s entry valves. U.S. freight rail networks. into the control valve market would Paragraph II(G) of the proposed Final E. Anticompetitive Effects have posed an immediate threat to the Judgment defines the Divestiture Assets incumbent suppliers’ by forcing them to to include all assets owned or under the 1. Freight Car Hand Brakes, Slack compete aggressively or risk losing a control of Faiveley at the current ARF Adjusters, Truck-Mounted Brake sale to Faiveley. This market is also facility in Greenville, South Carolina, Assemblies, Empty Load Devices, and characterized by bargaining and price and include Faiveley’s full and Brake Cylinders competition and involves the same complete interest, rights, and property Wabtec and Faiveley presently competitive dynamics described above. in ARF and the FTEN control valve. The compete vigorously in the development, Faiveley’s customers would have Divestiture Assets include all tangible manufacture, and sale of hand brakes, enjoyed enhanced price competition assets relating to ARF and the FTEN slack adjusters, TMBs, empty load immediately as Faiveley strove to gain control valve, including, but not limited

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to, research and development activities; In the event that Defendants do not all the Divestiture Assets to a single all manufacturing equipment, tooling accomplish the divestiture within the Acquirer. The Divestiture Assets may and fixed assets, including, at the option period prescribed in the proposed Final not be sold piecemeal. This is to protect of the Acquirer, the braking simulation Judgment, Paragraph V(A) of the the integrity of the Divestiture Assets as testing equipment known as the proposed Final Judgment provides that an ongoing, viable business and to ‘‘whale’’ located at Greenville, South the Court will appoint a trustee selected enable the existing business to continue Carolina, personal property, inventory, by the United States to effect the as a vigorous competitor in the future. office furniture, materials, supplies, and divestiture. If a trustee is appointed, the Section XI of the proposed Final other tangible property; all licenses, proposed Final Judgment provides that Judgment requires Wabtec to provide permits and authorizations issued by Wabtec will pay all costs and expenses notification to the Antitrust Division of any governmental organization; all of the trustee. The trustee’s commission certain proposed acquisitions not contracts, teaming arrangements, will be structured so as to provide an otherwise subject to filing under the agreements, leases, commitments, incentive for the trustee based on the Hart-Scott Rodino Act, 15 U.S.C. 18a certifications, and understandings, price obtained and the speed with (the ‘‘HSR Act’’), and in the same format including supply agreements; all which the divestiture is accomplished. as, and per the instructions relating to customer lists, contracts, accounts, and After his or her appointment becomes the notification required under that credit records; all repair and effective, the trustee will file monthly statute. The notification requirement performance records, and all other reports with the Court and the United applies in the case of any direct or records. States setting forth his or her efforts to indirect acquisitions of any assets of or The Divestiture Assets also include all accomplish the divestiture. At the end interest in any entity engaged in certain intangible assets relating to ARF and the of six months, if the divestiture has not activities relating to freight car brake FTEN control valve, including, but not been accomplished, the trustee and the systems or components in the United limited to, all patents, licenses and United States will make States. Section XI further provides for sublicenses, intellectual property, recommendations to the Court, which waiting periods and opportunities for copyrights, trademarks, trade names, shall enter such orders as appropriate, the United States to obtain additional service marks, service names, technical in order to carry out the purpose of the information similar to the provisions of information, computer software and trust, including extending the trust or the HSR Act before such acquisitions related documentation, know-how, the term of the trustee’s appointment. can be consummated. trade secrets, drawings, blueprints, Paragraph IV(I) of the proposed Final IV. Remedies Available to Potential designs, design protocols, specifications Judgment provides that final approval of Private Litigants for materials, specifications for parts the divestiture, including the identity of and devices, safety procedures for the the Acquirer, is left to the sole Section 4 of the Clayton Act, 15 handling of materials and substances, discretion of the United States to ensure U.S.C. 15, provides that any person who quality assurance and control the continued independence and has been injured as a result of conduct procedures, design tools and simulation viability of the Divestiture Assets in the prohibited by the antitrust laws may capability, all manuals and technical relevant markets. In this matter, Amsted bring suit in federal court to recover information Faiveley provides to its has been identified as the expected three times the damages the person has own employees, customers, suppliers, purchaser of the Divestiture Assets and suffered, as well as costs and reasonable agents or licensees, and all research is currently in final negotiations with attorneys’ fees. Entry of the proposed data, including, but not limited to, Defendants for a purchase agreement. Final Judgment will neither impair nor designs of experiments, and the results After a thorough examination of assist the bringing of any private of successful and unsuccessful designs Amsted, its plans for the Divestiture antitrust damage action. Under the and experiments. Assets and the proposed sale provisions of Section 5(a) of the Clayton Paragraph IV(A) of the proposed Final agreements, as well as consideration of Act, 15 U.S.C. 16(a), the proposed Final Judgment requires Defendants, within feedback from customers, the United Judgment has no prima facie effect in twenty (20) calendar days after the States approved Amsted as the buyer. any subsequent private lawsuit that may signing of the Hold Separate Stipulation Amsted is a strong competitor in other be brought against Defendants. and Order in this matter to divest the freight car equipment such as bogies, V. Procedures Available for Divestiture Assets in a manner wheels, and axles. It is uniquely Modification of the Proposed Final consistent with the Final Judgment to positioned as the current face of Judgment Amsted or an Acquirer acceptable to the Faiveley brake components to the United States, in its sole discretion. The marketplace (through ARF) and has The United States and Defendants Divestiture Assets must be divested in been the expected conduit through have stipulated that the proposed Final such a way as to satisfy the United which FTEN was to be marketed by Judgment may be entered by the Court States in its sole discretion that they Faiveley absent the merger. Amsted’s after compliance with the provisions of assets can and will be operated by the intimate familiarity with the products, the APPA, provided that the United purchaser as a viable, ongoing business the personnel, the AAR approval States has not withdrawn its consent. that can compete effectively in the process, and the relevant customers The APPA conditions entry upon the relevant market. Defendants must take should ensure that in its hands the Court’s determination that the proposed all reasonable steps necessary to Divestiture Assets will provide Final Judgment is in the public interest. accomplish the divestiture quickly and meaningful competition. The APPA provides a period of at shall cooperate with the named acquirer Under Paragraph IV(I) of the proposed least sixty (60) days preceding the (Amsted) or any other prospective Final Judgment, in the event Amsted is effective date of the proposed Final purchaser. The United States, in its sole unable to acquire the Divestiture Assets, Judgment within which any person may discretion, may agree to one or more another Acquirer may purchase the submit to the United States written extensions of this time period not to Divestiture Assets, subject to approval comments regarding the proposed Final exceed sixty (60) calendar days in total, by the Department in its sole discretion. Judgment. Any person who wishes to and shall notify the Court in such The divestiture of assets must be comment should do so within sixty (60) circumstances. accomplished as a single divestiture of days of the date of publication of this

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Competitive Impact Statement in the whether entry of the proposed Final remedy secured and the specific Federal Register, or the last date of Judgment is ‘‘in the public interest.’’ 15 allegations set forth in the government’s publication in a newspaper of the U.S.C. 16(e)(1). In making that complaint, whether the decree is summary of this Competitive Impact determination, the court, in accordance sufficiently clear, whether enforcement Statement, whichever is later. All with the statute as amended in 2004, is mechanisms are sufficient, and whether comments received during this period required to consider: the decree may positively harm third will be considered by the United States (A) the competitive impact of such parties. See Microsoft, 56 F.3d at 1458– Department of Justice, which remains judgment, including termination of alleged 62. With respect to the adequacy of the free to withdraw its consent to the violations, provisions for enforcement and relief secured by the decree, a court may proposed Final Judgment at any time modification, duration of relief sought, not ‘‘engage in an unrestricted prior to the Court’s entry of judgment. anticipated effects of alternative remedies evaluation of what relief would best The comments and the response of the actually considered, whether its terms are serve the public.’’ United States v. BNS, United States will be filed with the ambiguous, and any other competitive Inc., 858 F.2d 456, 462 (9th Cir. 1988) considerations bearing upon the adequacy of Court. In addition, comments will be such judgment that the court deems (quoting United States v. Bechtel Corp., posted on the U.S. Department of necessary to a determination of whether the 648 F.2d 660, 666 (9th Cir. 1981)); see Justice, Antitrust Division’s Internet consent judgment is in the public interest; also Microsoft, 56 F.3d at 1460–62; Web site and, under certain and United States v. Alcoa, Inc., 152 F. circumstances, published in the Federal (B) the impact of entry of such judgment Supp. 2d 37, 40 (D.D.C. 2001); InBev, Register. upon competition in the relevant market or 2009 U.S. Dist. LEXIS 84787, at *3. Written comments should be markets, upon the public generally and Courts have held that: individuals alleging specific injury from the submitted to: Maribeth Petrizzi, Chief, [t]he balancing of competing social and Litigation II Section, 450 Fifth Street violations set forth in the complaint including consideration of the public benefit, political interests affected by a proposed NW., Suite 8700, Antitrust Division, if any, to be derived from a determination of antitrust consent decree must be left, in the United States Department of Justice, the issues at trial. first instance, to the discretion of the Washington, DC 20530. Attorney General. The court’s role in Id. at § 16(e)(1)(A) & (B). In considering The proposed Final Judgment provides protecting the public interest is one of these statutory factors, the court’s that the Court retains jurisdiction over insuring that the government has not inquiry is necessarily a limited one as breached its duty to the public in consenting this action, and the parties may apply to the government is entitled to ‘‘broad to the decree. The court is required to the Court for any order necessary or discretion to settle with the defendant determine not whether a particular decree is appropriate for the modification, within the reaches of the public the one that will best serve society, but interpretation, or enforcement of the whether the settlement is ‘‘within the reaches interest.’’ United States v. Microsoft Final Judgment. of the public interest.’’ More elaborate Corp., 56 F.3d 1448, 1461 (D.C. Cir. requirements might undermine the VI. Alternatives to the Proposed Final 1995); see generally United States v. effectiveness of antitrust enforcement by Judgment SBC Commc’ns, Inc., 489 F. Supp. 2d 1 consent decree. The United States considered, as an (D.D.C. 2007) (assessing public interest Bechtel, 648 F.2d at 666 (emphasis alternative to the proposed Final standard under the Tunney Act); United added) (citations omitted).2 In Judgment, a full trial on the merits States v. U.S. Airways Group, Inc., 38 F. determining whether a proposed against Defendants. The United States Supp. 3d 69, 75 (D.D.C. 2014) (noting settlement is in the public interest, a could have continued the litigation and that the court’s ‘‘inquiry is limited’’ district court ‘‘must accord deference to sought preliminary and permanent because the government has ‘‘broad the government’s predictions about the injunctions against Wabtec’s acquisition discretion’’ to determine the adequacy efficacy of its remedies, and may not of Faiveley. The United States is of the relief secured through a require that the remedies perfectly satisfied, however, that the divestiture settlement); United States v. InBev N.V./ match the alleged violations.’’ SBC of assets described in the proposed S.A., No. 08–1965 (JR), 2009–2 Trade Commc’ns, 489 F. Supp. 2d at 17; see Final Judgment will preserve Cas. (CCH) ¶ 76,736, 2009 U.S. Dist. also U.S. Airways, 8 F. Supp. 3d at 75 competition for the development, LEXIS 84787, at *3 (D.D.C. Aug. 11, (noting that a court should not reject the manufacture, and sale of certain 2009) (noting that the court’s review of proposed remedies because it believes components of a freight car brake a consent judgment is limited and only others are preferable); Microsoft, 56 F.3d system, including hand brakes, slack inquires ‘‘into whether the government’s at 1461 (noting the need for courts to be adjusters, truck-mounted brake determination that the proposed ‘‘deferential to the government’s assemblies, empty load devices, brake remedies will cure the antitrust predictions as to the effect of the cylinders, and control valves, in the violations alleged in the complaint was proposed remedies’’); United States v. reasonable, and whether the mechanism relevant markets identified by the Archer-Daniels-Midland Co., 272 F. to enforce the final judgment are clear United States. Thus, the proposed Final 1 Supp. 2d 1, 6 (D.D.C. 2003) (noting that Judgment would achieve all or and manageable.’’). As the United States Court of Appeals the court should grant due respect to the substantially all of the relief the United for the District of Columbia Circuit has government’s prediction as to the effect States would have obtained through held, a court conducting inquiry under of proposed remedies, its perception of litigation, but avoids the time, expense, the APPA may consider, among other and uncertainty of a full trial on the 2 Cf. BNS, 858 F.2d at 464 (holding that the things, the relationship between the merits. court’s ‘‘ultimate authority under the [APPA] is limited to approving or disapproving the consent VII. Standard of Review Under the 1 The 2004 amendments substituted ‘‘shall’’ for decree’’); United States v. Gillette Co., 406 F. Supp. APPA for the Proposed Final Judgment ‘‘may’’ in directing relevant factors for court to 713, 716 (D. Mass. 1975) (noting that, in this way, consider and amended the list of factors to focus on the court is constrained to ‘‘look at the overall The APPA requires that proposed competitive considerations and to address picture not hypercritically, nor with a microscope, consent judgments in antitrust cases potentially ambiguous judgment terms. Compare 15 but with an artist’s reducing glass’’). See generally U.S.C. 16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); Microsoft, 56 F.3d at 1461 (discussing whether ‘‘the brought by the United States be subject see also SBC Commc’ns, 489 F. Supp. 2d at 11 remedies [obtained in the decree are] so to a sixty-day comment period, after (concluding that the 2004 amendments ‘‘effected inconsonant with the allegations charged as to fall which the court shall determine minimal changes’’ to Tunney Act review). outside of the ‘reaches of the public interest’ ’’).

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the market structure, and its views of make a mockery of judicial power.’’ 489 United States Department of Justice the nature of the case). F. Supp. 2d at 15. Antitrust Division, Litigation II Section Courts have greater flexibility in In its 2004 amendments, Congress 450 Fifth Street NW., Suite 8700 approving proposed consent decrees made clear its intent to preserve the Washington, DC 20530 than in crafting their own decrees Telephone: (202) 598–8023 practical benefits of utilizing consent Facsimile: (202) 514–9033 following a finding of liability in a decrees in antitrust enforcement, adding [email protected] litigated matter. ‘‘[A] proposed decree the unambiguous instruction that must be approved even if it falls short ‘‘[n]othing in this section shall be United States District Court for the of the remedy the court would impose construed to require the court to District of Columbia on its own, as long as it falls within the conduct an evidentiary hearing or to United States of America, Plaintiff, v. range of acceptability or is ‘within the require the court to permit anyone to Westinghouse Air Brake Technologies Corp., reaches of public interest.’ ’’ United intervene.’’ 15 U.S.C. 16(e)(2); see also Faiveley Transport S.A., and Faiveley States v. Am. Tel. & Tel. Co., 552 F. U.S. Airways, 38 F. Supp. 3d at 76 Transport North America, Defendants. Supp. 131, 151 (D.D.C. 1982) (citations (indicating that a court is not required Case No.: 1:16–cv–02147 omitted) (quoting United States v. to hold an evidentiary hearing or to Judge: Tanya S. Chutkan Gillette Co., 406 F. Supp. 713, 716 (D. permit intervenors as part of its review Filed: 10/26/2016 Mass. 1975)), aff’d sub nom. Maryland under the Tunney Act). This language Proposed Final Judgment v. United States, 460 U.S. 1001 (1983); codified what Congress intended when see also U.S. Airways, 38 F. Supp. 3d at it enacted the Tunney Act in 1974, as Whereas, Plaintiff, United States of 76 (noting that room must be made for the author of this legislation, Senator America, filed its Complaint on October the government to grant concessions in Tunney explained: ‘‘The court is 26, 2016, the United States and the negotiation process for settlements nowhere compelled to go to trial or to defendants, Westinghouse Air Brake (citing Microsoft, 56 F.3d at 1461); engage in extended proceedings which Technologies Corp., Faiveley Transport United States v. Alcan Aluminum Ltd., might have the effect of vitiating the S.A., and Faiveley Transport North 605 F. Supp. 619, 622 (W.D. Ky. 1985) benefits of prompt and less costly America, by their respective attorneys, (approving the consent decree even settlement through the consent decree have consented to the entry of this Final though the court would have imposed a process.’’ 119 Cong. Rec. 24,598 (1973) Judgment without trial or adjudication greater remedy). To meet this standard, (statement of Sen. Tunney). Rather, the of any issue of fact or law, and without the United States ‘‘need only provide a procedure for the public interest this Final Judgment constituting any factual basis for concluding that the determination is left to the discretion of evidence against or admission by any settlements are reasonably adequate the court, with the recognition that the party regarding any issue of fact or law; remedies for the alleged harms.’’ SBC court’s ‘‘scope of review remains And whereas, defendants agree to be Commc’ns, 489 F. Supp. 2d at 17. sharply proscribed by precedent and the bound by the provisions of this Final Moreover, the court’s role under the nature of Tunney Act proceedings.’’ Judgment pending its approval by the APPA is limited to reviewing the SBC Commc’ns, 489 F. Supp. 2d at 11.3 Court; remedy in relationship to the violations A court can make its public interest And whereas, the essence of this Final that the United States has alleged in its determination based on the competitive Judgment is the prompt and certain Complaint, and does not authorize the impact statement and response to public divestiture of certain rights and assets court to ‘‘construct [its] own comments alone. U.S. Airways, 38 F. by the defendants to assure that hypothetical case and then evaluate the Supp. 3d at 76. competition is not substantially decree against that case.’’ Microsoft, 56 lessened; F.3d at 1459; see also U.S. Airways, 38 VIII. Determinative Documents F. Supp 3d at 75 (noting that the court And whereas, the United States There are no determinative materials must simply determine whether there is requires defendants to make a certain or documents within the meaning of the a factual foundation for the divestiture for the purpose of remedying APPA that were considered by the government’s decisions such that its the loss of competition alleged in the United States in formulating the conclusions regarding the proposed Complaint; proposed Final Judgment. settlements are reasonable; InBev, 2009 And whereas, defendants have U.S. Dist. LEXIS 84787, at *20 Dated: October 26, 2016. represented to the United States that the (concluding that ‘‘the ‘public interest’ is Respectfully submitted, divestiture required below can and will not to be measured by comparing the /s/ lllllllllllllllllll be made and that defendants will later violations alleged in the complaint DOHA MEKKI raise no claim of hardship or difficulty against those the court believes could as grounds for asking the Court to have, or even should have, been 3 See also United States v. Enova Corp., 107 F. modify any of the divestiture provisions Supp. 2d 10, 17 (D.D.C. 2000) (noting that the contained below; alleged’’). Because the ‘‘court’s authority ‘‘Tunney Act expressly allows the court to make its to review the decree depends entirely public interest determination on the basis of the Now therefore, before any testimony on the government’s exercising its competitive impact statement and response to is taken, without trial or adjudication of prosecutorial discretion by bringing a comments alone’’); United States v. Mid-Am. any issue of fact or law, and upon Dairymen, Inc., No. 73–CV–681–W–1, 1977–1 Trade case in the first place,’’ it follows that Cas. (CCH) ¶ 61,508, at 71,980, *22 (W.D. Mo. 1977) consent of the parties, it is ordered, ‘‘the court is only authorized to review (‘‘Absent a showing of corrupt failure of the adjudged and decreed: the decree itself,’’ and not to ‘‘effectively government to discharge its duty, the Court, in I. Jurisdiction redraft the complaint’’ to inquire into making its public interest finding, should . . . carefully consider the explanations of the other matters that the United States did government in the competitive impact statement This Court has jurisdiction over the not pursue. Microsoft, 56 F.3d at 1459– and its responses to comments in order to subject matter of and each of the parties 60. As this Court confirmed in SBC determine whether those explanations are to this action. The Complaint states a Communications, courts ‘‘cannot look reasonable under the circumstances.’’); S. Rep. No. claim upon which relief may be granted 93–298, at 6 (1973) (‘‘Where the public interest can beyond the complaint in making the be meaningfully evaluated simply on the basis of against defendants under Section 7 of public interest determination unless the briefs and oral arguments, that is the approach that the Clayton Act, as amended (15 U.S.C. complaint is drafted so narrowly as to should be utilized.’’). 18).

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II. Definitions Carolina, personal property, inventory, sole discretion, may agree to one or As used in this Final Judgment: office furniture, materials, supplies, and more extensions of this time period not A. ‘‘Acquirer’’ means Amsted Rail other tangible property; all licenses, to exceed sixty (60) calendar days in Company, Inc., or another entity to permits and authorizations issued by total, and shall notify the Court in such which defendants divest the Divestiture any governmental organization; all circumstances. Defendants agree to use Assets. contracts, teaming arrangements, their best efforts to divest the B. ‘‘Wabtec’’ means defendant agreements, leases, commitments, Divestiture Assets as expeditiously as Westinghouse Air Brake Technologies certifications, and understandings, possible. B. In the event defendants are Corp., a Delaware corporation with its including supply agreements; all attempting to divest the Divestiture headquarters in Wilmerding, customer lists, contracts, accounts, and Assets to an Acquirer other than Pennsylvania, its successors and credit records; all repair and performance records and all other Amsted, defendants promptly shall assigns, and its subsidiaries, divisions, records; and make known, by usual and customary groups, affiliates, partnerships and joint 3. All intangible assets relating to means, the availability of the Divestiture ventures, and their directors, officers, Amsted Rail Faiveley LLC and the FTEN Assets. Defendants shall inform any managers, agents, and employees. control valve, including, but not limited person making an inquiry regarding a C. ‘‘Faiveley’’ means defendant to, all patents, licenses and sublicenses, possible purchase of the Divestiture Faiveley Transport S.A., a French intellectual property, copyrights, Assets that they are being divested corporation with its headquarters in trademarks, trade names, service marks, pursuant to this Final Judgment and Gennevilliers, France, its successors and and service names; technical provide that person with a copy of this assigns, and its subsidiaries, divisions, information, computer software and Final Judgment. groups, affiliates, partnerships and joint related documentation, know-how, C. In accomplishing the divestiture ventures, and their directors, officers, trade secrets, drawings, blueprints, ordered by this Final Judgment, managers, agents, and employees. designs, design protocols, and design defendants shall offer to furnish to all ‘‘Faiveley’’ includes defendant Faiveley tools and simulation capability; prospective Acquirers, subject to Transport North America, a New York specifications for materials; customary confidentiality assurances, corporation headquartered in specifications for parts and devices; all information and documents relating Greenville, South Carolina, a wholly- safety procedures for the handling of to the Divestiture Assets customarily owned subsidiary of Faiveley Transport materials and substances; quality provided in a due diligence process S.A. assurance and control procedures; all except such information or documents D. ‘‘Amsted’’ means Amsted Rail manuals and technical information subject to the attorney-client privileges Company, Inc., an Illinois corporation Faiveley provides to its own employees, or work-product doctrine. Defendants with its headquarters in Chicago, customers, suppliers, agents or shall make available such information to Illinois, its successors and assigns, and licensees; and all research data, the United States at the same time that its subsidiaries, divisions, groups, including, but not limited to, designs of such information is made available to affiliates, partnerships and joint experiments, and the results of any other person. ventures, and their directors, officers, successful and unsuccessful designs and D. Defendants shall provide the managers, agents, and employees. experiments. Acquirer and the United States Amsted is a wholly-owned subsidiary of information relating to Faiveley Amsted Industries Incorporated of III. Applicability personnel with responsibilities for Chicago, Illinois. A. This Final Judgment applies to Amsted Rail Faiveley LLC or the FTEN E. ‘‘Amsted Rail Faiveley LLC’’ means Wabtec and Faiveley, as defined above, control valve to enable the Acquirer to the ongoing business and all associated and all other persons in active concert make offers of employment. Defendants assets of a joint venture that currently or participation with any of them who will not interfere with any negotiations exists between Faiveley and Amsted, receive actual notice of this Final by the Acquirer to employ any Faiveley was established in 2010 for the purpose Judgment by personal service or employee whose primary responsibility of manufacturing and selling freight car otherwise. is the production, development, and brake components, and has B. If, prior to complying with Section sale of products relating to Amsted Rail headquarters located in Greenville, IV and V of this Final Judgment, Faiveley LLC and the FTEN control South Carolina. defendants sell or otherwise dispose of valve. F. ‘‘FTEN control valve’’ means the all or substantially all of their assets or E. Defendants shall permit the ongoing project and all associated assets of lesser business units that include the Acquirer of the Divestiture Assets to of the freight car brake control valve for Divestiture Assets, they shall require the have reasonable access to personnel and freight car brake systems developed or purchaser to be bound by the provisions to make inspections of the physical under development by Faiveley. of this Final Judgment. Defendants need facilities relating to the Divestiture G. ‘‘Divestiture Assets’’ means: not obtain such an agreement from the Assets; access to any and all 1. Faiveley’s full and complete Acquirer of the assets divested pursuant environmental, zoning, and other permit interest, rights, and property in Amsted to this Final Judgment. documents and information; and access Rail Faiveley LLC and the FTEN control to any and all financial, operational, or IV. Divestiture valve; other documents and information 2. All tangible assets relating to A. Defendants are ordered and customarily provided as part of a due Amsted Rail Faiveley LLC and the FTEN directed, within twenty (20) calendar diligence process. control valve, including, but not limited days after the signing of the Hold F. Defendants shall warrant to the to, research and development activities; Separate Stipulation and Order in this Acquirer(s) that each asset will be all manufacturing equipment, tooling matter to divest the Divestiture Assets in operational on the date of sale. and fixed assets, including, at the option a manner consistent with this Final G. Defendants shall not take any of the Acquirer, the braking simulation Judgment to Amsted or an Acquirer action that will impede in any way the testing equipment known as the acceptable to the United States, in its permitting, operation, or divestiture of ‘‘whale’’ located at the Greenville, South sole discretion. The United States, in its the Divestiture Assets.

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H. Defendants shall warrant to the Judgment, and shall have such other and the rate of compensation to Acquirer that there are no material powers as this Court deems appropriate. defendants and the United States. defects in the environmental, zoning or Subject to Paragraph V(D) of this Final E. Defendants shall use their best other permits pertaining to the Judgment, the Divestiture Trustee may efforts to assist the Divestiture Trustee operation of each asset, and that hire at the cost and expense of in accomplishing the required following the sale of the Divestiture defendants any investment bankers, divestiture. The Divestiture Trustee and Assets, defendants will not undertake, attorneys, or other agents, who shall be any consultants, accountants, attorneys, directly or indirectly, any challenges to solely accountable to the Divestiture and other agents retained by the the environmental, zoning, or other Trustee, reasonably necessary in the Divestiture Trustee shall have full and permits relating to the operation of the Divestiture Trustee’s judgment to assist complete access to the personnel, books, Divestiture Assets. in the divestiture. Any such investment records, and facilities of the business to I. Unless the United States otherwise bankers, attorneys, or other agents shall be divested, and defendants shall consents in writing, the divestiture serve on such terms and conditions as develop financial and other information pursuant to Section IV, or by Divestiture the United States approves including relevant to such business as the Trustee appointed pursuant to Section confidentiality requirements and Divestiture Trustee may reasonably V, of this Final Judgment, shall include conflict of interest certifications. request, subject to reasonable protection the entire Divestiture Assets, and shall C. Defendants shall not object to a sale for trade secret or other confidential be accomplished in such a way as to by the Divestiture Trustee on any research, development, or commercial satisfy the United States, in its sole ground other than the Divestiture information or any applicable discretion, that the Divestiture Assets Trustee’s malfeasance. Any such privileges. Defendants shall take no can and will be used by the Acquirer as objections by defendants must be action to interfere with or to impede the part of a viable, ongoing business in the conveyed in writing to the United States Divestiture Trustee’s accomplishment of design, development, manufacture, and the Divestiture Trustee within ten the divestiture. marketing, servicing, distribution, and (10) calendar days after the Divestiture F. After its appointment, the sale of products relating to Amsted Rail Trustee has provided the notice Divestiture Trustee shall file monthly Faiveley LLC and the FTEN control required under Section VI. reports with the United States and, as valve. The divestiture, whether D. The Divestiture Trustee shall serve appropriate, the Court setting forth the pursuant to Section IV or V of this Final at the cost and expense of Wabtec Divestiture Trustee’s efforts to Judgment, shall be made to an Acquirer pursuant to a written agreement, on accomplish the divestiture ordered that, in the United States’s sole such terms and conditions as the United under this Final Judgment. To the extent judgment, has the intent and capability States approves, including such reports contain information that (including the necessary managerial, confidentiality requirements and the Divestiture Trustee deems operational, technical and financial conflict of interest certifications. The confidential, such reports shall not be capability) of competing effectively in Divestiture Trustee shall account for all filed in the public docket of the Court. the design, development, manufacture, monies derived from the sale of the Such reports shall include the name, marketing, servicing, distribution, and assets sold by the Divestiture Trustee address, and telephone number of each sale of products relating to Amsted Rail and all costs and expenses so incurred. person who, during the preceding Faiveley LLC and the FTEN control After approval by the Court of the month, made an offer to acquire, valve; and that none of the terms of any Divestiture Trustee’s accounting, expressed an interest in acquiring, agreement between the Acquirer and including fees for its services yet unpaid entered into negotiations to acquire, or defendants give defendants the ability and those of any professionals and was contacted or made an inquiry about unreasonably to raise the Acquirer’s agents retained by the Divestiture acquiring, any interest in the Divestiture costs, to lower the Acquirer’s efficiency, Trustee, all remaining money shall be Assets, and shall describe in detail each or otherwise to interfere in the ability of paid to Wabtec and the trust shall then contact with any such person. The the Acquirer to compete effectively. be terminated. The compensation of the Divestiture Trustee shall maintain full Divestiture Trustee and any records of all efforts made to divest the V. Appointment of Divestiture Trustee professionals and agents retained by the Divestiture Assets. A. If defendants have not divested the Divestiture Trustee shall be reasonable G. If the Divestiture Trustee has not Divestiture Assets within the time in light of the value of the Divestiture accomplished the divestiture ordered period specified in Paragraph IV(A), Assets and based on a fee arrangement under this Final Judgment within six defendants shall notify the United providing the Divestiture Trustee with months after its appointment, the States of that fact in writing. Upon an incentive based on the price and Divestiture Trustee shall promptly file application of the United States, the terms of the divestiture and the speed with the Court a report setting forth (1) Court shall appoint a Divestiture with which it is accomplished, but the Divestiture Trustee’s efforts to Trustee selected by the United States timeliness is paramount. If the accomplish the required divestiture, (2) and approved by the Court to effect the Divestiture Trustee and Wabtec are the reasons, in the Divestiture Trustee’s divestiture of the Divestiture Assets. unable to reach agreement on the judgment, why the required divestiture B. After the appointment of a Divestiture Trustee’s or any agent’s or has not been accomplished, and (3) the Divestiture Trustee becomes effective, consultant’s compensation or other Divestiture Trustee’s recommendations. only the Divestiture Trustee shall have terms and conditions of engagement To the extent such report contains the right to sell the Divestiture Assets. within fourteen (14) calendar days of information that the Divestiture Trustee The Divestiture Trustee shall have the appointment of the Divestiture Trustee, deems confidential, such report shall power and authority to accomplish the the United States may, in its sole not be filed in the public docket of the divestiture to an Acquirer acceptable to discretion, take appropriate action, Court. The Divestiture Trustee shall at the United States at such price and on including making a recommendation to the same time furnish such report to the such terms as are then obtainable upon the Court. The Divestiture Trustee shall, United States which shall have the right reasonable effort by the Divestiture within three (3) business days of hiring to make additional recommendations Trustee, subject to the provisions of any other professionals or agents, consistent with the purpose of the trust. Sections IV, V, and VI of this Final provide written notice of such hiring The Court thereafter shall enter such

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orders as it shall deem appropriate to a divestiture proposed under Section IV affidavit describing any changes to the carry out the purpose of the Final or V shall not be consummated. Upon efforts and actions outlined in Judgment, which may, if necessary, objection by defendants under defendants’ earlier affidavits filed include extending the trust and the term Paragraph V(C), a divestiture proposed pursuant to this section within fifteen of the Divestiture Trustee’s appointment under Section V shall not be (15) calendar days after the change is by a period requested by the United consummated unless approved by the implemented. States. Court. C. Defendants shall keep all records of H. If the United States determines that all efforts made to preserve and divest the Divestiture Trustee has ceased to act VII. Financing the Divestiture Assets until one year or failed to act diligently or in a Defendants shall not finance all or after such divestiture has been reasonably cost-effective manner, it may any part of any purchase made pursuant completed. recommend the Court appoint a to Section IV or V of this Final X. Compliance Inspection substitute Divestiture Trustee. Judgment. A. For the purposes of determining or VI. Notice of Proposed Divestiture VIII. Hold Separate securing compliance with this Final A. Within two (2) business days Until the divestiture required by this Judgment, or of any related orders such following execution of a definitive Final Judgment has been accomplished, as any Hold Separate Stipulation and divestiture agreement, defendants or the defendants shall take all steps necessary Order, or of determining whether the Divestiture Trustee, whichever is then to comply with the Hold Separate Final Judgment should be modified or responsible for effecting the divestiture Stipulation and Order entered by this vacated, and subject to any legally required herein, shall notify the United Court. Defendants shall take no action recognized privilege, from time to time States of any proposed divestiture that would jeopardize the divestiture authorized representatives of the United required by Section IV or V of this Final ordered by this Court. States Department of Justice, including Judgment. If the Divestiture Trustee is IX. Affidavits consultants and other persons retained responsible, it shall similarly notify by the United States, shall, upon written defendants. The notice shall set forth A. Within twenty (20) calendar days request of an authorized representative the details of the proposed divestiture of the filing of the Complaint in this of the Assistant Attorney General in and list the name, address, and matter, and every thirty (30) calendar charge of the Antitrust Division, and on telephone number of each person not days thereafter until the divestiture has reasonable notice to defendants, be previously identified who offered or been completed under Section IV or V, permitted: expressed an interest in or desire to defendants shall deliver to the United 1. Access during defendants’ office acquire any ownership interest in the States an affidavit as to the fact and hours to inspect and copy, or at the Divestiture Assets, together with full manner of its compliance with Section option of the United States, to require details of the same. IV or V of this Final Judgment. Each defendants to provide hard copy or B. Within fifteen (15) calendar days of such affidavit shall include the name, electronic copies of, all books, ledgers, receipt by the United States of such address, and telephone number of each accounts, records, data, and documents notice, the United States may request person who, during the preceding thirty in the possession, custody, or control of from defendants, the proposed Acquirer, (30) calendar days, made an offer to defendants, relating to any matters any other third party, or the Divestiture acquire, expressed an interest in contained in this Final Judgment; and Trustee, if applicable, additional acquiring, entered into negotiations to 2. to interview, either informally or on information concerning the proposed acquire, or was contacted or made an the record, defendants’ officers, divestiture, the proposed Acquirer, and inquiry about acquiring, any interest in employees, or agents, who may have any other potential Acquirer. the Divestiture Assets, and shall their individual counsel present, Defendants and the Divestiture Trustee describe in detail each contact with any regarding such matters. The interviews shall furnish any additional information such person during that period. Each shall be subject to the reasonable requested within fifteen (15) calendar such affidavit shall also include a convenience of the interviewee and days of the receipt of the request, unless description of the efforts defendants without restraint or interference by the parties shall otherwise agree. have taken to solicit buyers for the defendants. C. Within thirty (30) calendar days Divestiture Assets, and to provide B. Upon the written request of an after receipt of the notice or within required information to prospective authorized representative of the twenty (20) calendar days after the Acquirers, including the limitations, if Assistant Attorney General in charge of United States has been provided the any, on such information. Assuming the the Antitrust Division, defendants shall additional information requested from information set forth in the affidavit is submit written reports or response to defendants, the proposed Acquirer, any true and complete, any objection by the written interrogatories, under oath if third party, and the Divestiture Trustee, United States to information provided requested, relating to any of the matters whichever is later, the United States by defendants, including limitation on contained in this Final Judgment as may shall provide written notice to information, shall be made within be requested. defendants and the Divestiture Trustee, fourteen (14) calendar days of receipt of C. No information or documents if there is one, stating whether or not it such affidavit. obtained by the means provided in this objects to the proposed divestiture. If B. Within twenty (20) calendar days section shall be divulged by the United the United States provides written of the filing of the Complaint in this States to any person other than an notice that it does not object, the matter, defendants shall deliver to the authorized representative of the divestiture may be consummated, United States an affidavit that describes executive branch of the United States, subject only to defendants’ limited right in reasonable detail all actions except in the course of legal proceedings to object to the sale under Paragraph defendants have taken and all steps to which the United States is a party V(C) of this Final Judgment. Absent defendants have implemented on an (including grand jury proceedings), or written notice that the United States ongoing basis to comply with Section for the purpose of securing compliance does not object to the proposed Acquirer VIII of this Final Judgment. Defendants with this Final Judgment, or as or upon objection by the United States, shall deliver to the United States an otherwise required by law.

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D. If at the time information or Wabtec shall not consummate the DEPARTMENT OF JUSTICE documents are furnished by defendants proposed transaction or agreement until to the United States, defendants thirty (30) calendar days after Antitrust Division represent and identify in writing the submitting all such additional United States v. Fayez Sarofim; material in any such information or information. Early termination of the Proposed Final Judgment and documents to which a claim of waiting periods in this paragraph may Competitive Impact Statement protection may be asserted under Rule be requested and, where appropriate, 26(c)(1)(g) of the Federal Rules of Civil granted in the same manner as is Notice is hereby given pursuant to the Procedure, and defendants mark each applicable under the requirements and Antitrust Procedures and Penalties Act, pertinent page of such material, provisions of the HSR Act and rules 15 U.S.C. 16(b)–(h), that a proposed ‘‘Subject to claim of protection under promulgated thereunder. This Section Final Judgment, Stipulation, and Rule 26(c)(1)(g) of the Federal Rules of Competitive Impact Statement have Civil Procedure,’’ then the United States shall be broadly construed and any ambiguity or uncertainty regarding the been filed with the United States shall give defendants ten (10) calendar District Court for the District of days notice prior to divulging such filing of notice under this Section shall be resolved in favor of filing notice. Columbia in United States of America v. material in any legal proceeding (other Fayez Sarofim, Civil Action No. 1:16– than a grand jury proceeding). XII. No Reacquisition cv–02156. On October 27, 2016, the XI. Notification United States filed a Complaint alleging Wabtec may not reacquire any part of A. Unless such transaction is that Fayez Sarofim violated the the Divestiture Assets during the term of premerger notification and waiting otherwise subject to the reporting and this Final Judgment. waiting period requirements of the Hart- period requirements of the Hart-Scott- Scott-Rodino Antitrust Improvements XIII. Retention of Jurisdiction Rodino Antitrust Improvements Act of Act of 1976, as amended, 15 U.S.C. 18a 1976, 15 U.S.C. 18a, with respect to his (the ‘‘HSR Act’’), during the term of this This Court retains jurisdiction to acquisitions of voting securities of Final Judgment, Wabtec, without enable any party to this Final Judgment Kinder Morgan, Inc. and Kemper providing advance notification to the to apply to this Court at any time for Corporation. The proposed Final Antitrust Division, shall not directly or further orders and directions as may be Judgment, filed at the same time as the indirectly acquire any assets of or any necessary or appropriate to carry out or Complaint, requires Fayez Sarofim to interest, including, but not limited to, construe this Final Judgment, to modify pay a civil penalty of $720,000. any financial, security, loan, equity, or any of its provisions, to enforce Copies of the Complaint, proposed management interest, in any entity compliance, and to punish violations of Final Judgment, and Competitive Impact engaged in the design, development, its provisions. Statement are available for inspection production (including the provision of on the Antitrust Division’s Web site at any input product comprising five XIV. Expiration of Final Judgment http://www.justice.gov/atr and at the percent or more of the value of any final Office of the Clerk of the United States Unless this Court grants an extension, District Court for the District of product), marketing, servicing, this Final Judgment shall expire ten distribution, or sale of freight car brake Columbia. Copies of these materials may years from the date of its entry. systems or components thereof in the be obtained from the Antitrust Division United States. XV. Public Interest Determination upon request and payment of the B. Such notification shall be provided copying fee set by Department of Justice to the Antitrust Division in the same Entry of this Final Judgment is in the regulations. format as, and per the instructions public interest. The parties have Public comment is invited within 60 relating to the Notification and Report complied with the requirements of the days of the date of this notice. Such Form set forth in the Appendix to Part Antitrust Procedures and Penalties Act, comments, including the name of the 803 of Title 16 of the Code of Federal 15 U.S.C. 16, including making copies submitter, and responses thereto, will be Regulations as amended, except that the available to the public of this Final posted on the Antitrust Division’s Web information requested in Items 5 Judgment, the Competitive Impact site, filed with the Court, and, under through 9 of the instructions must be Statement, and any comments thereon certain circumstances, published in the provided only about freight car brake and the United States’ responses to Federal Register. Comments should be systems or components thereof comments. Based upon the record directed to Daniel P. Ducore, Special Attorney, United States, c/o Federal described in Section V of the Complaint before the Court, which includes the filed in this matter (including any input Trade Commission, 600 Pennsylvania Competitive Impact Statement and any product comprising five percent or more Avenue NW., CC–8416, Washington, DC comments and response to comments of the value of any final product). 20580 (telephone: 202–326–2526; email: Notification shall be provided at least filed with the Court, entry of this Final [email protected]). thirty (30) calendar days prior to Judgment is in the public interest. Patricia A. Brink, acquiring any such interest, and shall Date: llllllllllllllllll Director of Civil Enforcement. include, beyond what may be required Court approval subject to procedures of by the applicable instructions, the Antitrust Procedures and Penalties Act, 15 In the United States District Court names of the principal representatives U.S.C. 16. for the District of Columbia of the parties to the agreement who lllllllllllllllllllll UNITED STATES OF AMERICA, c/o negotiated the agreement, and any United States District Judge Department of Justice, Washington, D.C. management or strategic plans [FR Doc. 2016–26781 Filed 11–4–16; 8:45 am] 20530, Plaintiff, v. Fayez Sarofim, Two discussing the proposed transaction. If BILLING CODE P Houston Center, Suite 2907, Houston, TX within the thirty-day period after 77010, Defendant. notification, representatives of the Case No.: 1:16–cv–02156 Antitrust Division make a written Judge: Rudolph Contreras request for additional information, Filed: 10/27/2016

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