Antitrust Law Daily Wrap Up, ANTITRUST—D.D.C.: U.S. consent decree resolving challenge to combination of oil and gas industry service providers approved, (Sep 20, 2013)

By Jeffrey May, J.D.

The federal district court in Washington, D.C. yesterday entered a consent decree resolving a Department of Justice Antitrust Division challenge to Ecolab Inc.’s acquisition of Permian Mud Service, Inc.—the parent company of Champion Technologies Inc. and Corsicana Technologies (U.S. v. Ecolab Inc., September 19, 2013, Sullivan, E.).

Ecolab—a provider of water, hygiene and energy technologies and services—and Permian Mud—a supplier of specialty oilfield chemistry and related services—announced the proposed transaction in October 2012.

In April 2013, the Antitrust Division filed a complaint, alleging that Ecolab’s acquisition of Permian would combine the two leading providers of production chemical management services for deepwater oil and gas wells (deepwater PCMS) in the U.S. Gulf of Mexico. At the same time, the government announced for public comment a proposed consent decree intended to settle the government’s antitrust concerns.

The consent decree permitted the acquisition to proceed subject to an agreement to divest assets used by Permian subsidiary Champion Technologies to provide production chemical management services in the Gulf of Mexico. The consent decree identified the acquirer as Clariant Corporation. Clariant Corporation is the U.S. affiliate of Swiss-based Clariant International Ltd., the fourth largest provider of production chemical management services globally.

The relevant divestiture assets included those used to provide deepwater production chemical management services in the Gulf, such as the patent for Champion’s best-selling production chemical in the deepwater Gulf, exclusive licenses to all other production chemicals used by Champion in the Gulf, and the option to buy Champion’s deepwater production chemical blending and distribution facility in Broussard, Louisiana, and related equipment.

Shortly after the settlement was reached in April, Ecolab closed on the acquisition. The total transaction, including assumed debt, was valued at approximately $2.3 billion, according to the parties.

The case is Civil Action No. 1:13-cv-00444.

Attorneys: Katherine A. Celeste for U.S. Department of Justice. John H. Lyons (Skadden, Arps, Slate, Meagher & Flom LLP) for Ecolab Inc.

Companies: Champion Technologies, Inc.; Clariant Corporation; Ecolab Inc.; Permian Mud Service, Inc.

Cases: Antitrust DistrictofColumbiaNews AntitrustDivisionNews