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Dixon

In: Business and Management

Submitted By khm3823
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Harvard Business School 9-298-165
Rev. June 8, 1999
This case was prepared as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. It is a rewritten version of an earlier case entitled, “American Chemical Corporation,” HBS no.
280-102.
Copyright © 1998 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685 or write Harvard Business School Publishing, Boston, MA 02163. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.
1
Dixon Corporation: The Collinsville Plant
In June 1979, American Chemical Corporation announced a tender offer for any and all of the shares of the Universal Paper Corporation. American was one of the largest diversified chemical companies in the United States (Exhibit 1). Universal was a large paper and pulp company (Exhibit
2).
Universal’s management opposed the takeover and, among other things, sued in federal court to have the tender offer blocked on grounds that American’s acquisition of Universal would violate the Clayton Act of the U.S. antitrust laws. Both firms engaged in the production of sodium chlorate. Universal alleged that its acquisition by American would substantially reduce competition in the sodium chlorate business, particularly in the Southeastern U.S. market where the two firms were competitors. The U.S. government joined Universal in seeking a preliminary injunction to stop
American’s tender offer. Though it denied the allegations, American prevented a preliminary injunction by agreeing to divest its sodium chlorate plant located near Collinsville, Alabama in the event it acquired Universal. Amer

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