H.J. Heinz Company (Heinz) (defendant) was one of three major competitors in the market for baby food. Gerber Products Company (Gerber) was the first market leader with a share of 65 percent, Heinz was second with 17.4 percent, and Milnot Holding Corporation (Beech-Nut) (defendant) was third with 15.4 percent. In February 2000, Heinz and Beech-Nut reached an agreement to merge. Before the agreement, Heinz was viewed as a value brand and priced its products lower than its competitors. Beech-Nut marketed its baby food as a premium product, which was generally considered to be of a similar quality to Gerber’s products. Heinz manufactured its products at a plant operating at only 40 percent of production capacity. After learning of the proposed merger, the Federal Trade Commission (FTC) (plaintiff) sued Heinz and Beech-Nut, claiming that the merger would violate antitrust law by producing significant anticompetitive effects in the baby food market. The FTC sought a preliminary injunction to prevent the merger from occurring until the case could be tried on the merits. The district court denied the injunction, holding that Heinz had identified pro-competitive, post-merger efficiencies sufficient to offset the danger to competition. The FTC appealed.