## Facts

- Chicago Bridge & Iron Company N.V. and its U.S. subsidiary (CB&I) designed and built specialized industrial storage tanks and large thermal vacuum chambers (TVCs) in the United States.
- Pitt-Des Moines, Inc. (PDM) was a major competitor in the same lines of business.
- The FTC treated four separate U.S. product markets: field-erected LNG storage tanks, field-erected LPG storage tanks, field-erected LIN/LOX storage tanks, and large field-erected TVCs.
- In each market, CB&I and PDM were among the only significant suppliers; in several, they were effectively the only suppliers for long periods.
- On February 7, 2001, CB&I acquired the relevant PDM assets for about $84 million, consolidating the leading firms in each market.
- After administrative proceedings, the FTC concluded the acquisition was likely to substantially lessen competition or tend to create a monopoly, and ordered divestiture of the acquired assets plus related relief.
- CB&I petitioned for judicial review of the FTC’s final order.

## Issues

1. Whether the FTC properly defined four narrow relevant product markets and the United States as the geographic market for § 7 analysis.
2. Whether post-acquisition concentration and market shares established a prima facie likelihood of anticompetitive effects.
3. Whether claimed actual or potential entry (including foreign firms) rebutted the prima facie case as timely, likely, and sufficient.
4. Whether the FTC’s findings and competitive-effects predictions were supported by substantial evidence on appellate review.
5. Whether the divestiture order and related obligations were within the FTC’s remedial authority and reasonably tailored.

## Decision

- The Fifth Circuit denied CB&I’s petition for review and sustained the FTC’s order.
- The court held the FTC reasonably defined the relevant markets and reasonably treated the transaction as creating monopoly or near-monopoly conditions in highly concentrated markets.
- The court agreed that concentration evidence supported a strong prima facie showing of likely competitive harm under § 7.
- The court held CB&I did not rebut the prima facie case because the record supported high entry barriers and the lack of timely, likely, and sufficient entry.
- The court upheld the FTC’s remedial choice of divestiture as within the agency’s discretion for an unlawful consummated acquisition.

## Legal Principles

- A strong prima facie § 7 Clayton Act case may be established by high post-merger concentration and market shares, especially where a transaction combines the principal rivals in a specialized market.
- Rebuttal based on entry requires specific evidence that entry will be timely, likely, and sufficient to prevent a substantial lessening of competition; speculative or undeveloped entry claims are inadequate.
- On review of FTC merger determinations, factual findings are upheld if supported by substantial evidence, and the agency’s predictive economic judgments receive deference when grounded in the record.
- Divestiture is an appropriate and commonly used remedy for an unlawful consummated merger when it can restore lost competition; appellate review of the FTC’s remedy is highly deferential.

## Conclusion

The Fifth Circuit sustained the FTC’s determination that CB&I’s acquisition of PDM’s assets likely violated § 7 of the Clayton Act and § 5 of the FTC Act in four specialized U.S. markets, and it upheld divestiture as a permissible and reasonable remedy given the extreme concentration and absence of adequate entry.


Chicago Bridge & Iron Co. N.V. v. Fed. Trade Comm'n, 534 F.3d 410 (5th Cir. 2008)