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The Â鶹´«Ã½ Trade Commission has given final approval to a consent agreement with Alliant Techsystems Inc., settling charges over its $466 million acquisition of Hercules Aerospace Company. As a result of the acquisition, Alliant is both an ammunition and munitions producer and the only U.S. supplier of propellant for large-caliber ammunition. The FTC alleged that, absent the settlement, the acquisition could reduce weapons research, innovation and quality.

The Commission's action makes the settlement binding on Alliant, which is based in Hopkins, Minnesota. Hercules is headquartered in Wilmington, Delaware.

Under the final consent order, Alliant must construct a "fire wall" to prevent its newly-acquired propellant division from sharing with its ammunition and munitions division any non- public information that the propellant division receives from other ammunition and munitions makers. (The order has been modified to make clear that Alliant's ammunition and munitions division includes Hercules Defense Electronics Systems, Inc., the Clearwater, Florida-based entity Alliant acquired in the transaction.)

Alliant also must notify its propellant customers of the order before obtaining any nonpublic information from them.

The consent agreement was placed on the public record on Nov. 15, 1994, and issued in final and binding form by a 4-0 Commission vote on April 7. Commissioner Mary L. Azcuenaga issued a concurring statement, in which she said she voted to issue the consent order despite the omission of the standard 10- year prior-approval requirement for similar transactions, "based on the highly unusual facts of this case." Azcuenaga also questioned the extent to which the fire wall provision "adds to the protections afforded by private contracts to respect confidentiality" and the Commission's ability to monitor compliance with it effectively.

NOTE: A consent agreement is for settlement purposes only and does not constitute admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $10,000.

A news release summarizing the complaint and consent agree- ment was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release and of the final order are available from the FTC's Public Reference Branch, Room 130, 6th Street & Pennsylvania Avenue, N.W., Washington, D.C. 20580.

(FTC File No. 941 0123)
(Docket No. C-3567)