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FTC Aims to Block Consolidation in the Cement Industry

  • The Federal Trade Commission (“FTC”) filed an administrative complaint and authorized a suit in federal court to block the acquisition of cement producer Keystone Cement Company (“Keystone”) by rival cement producer Lehigh Cement Company LLC (“Lehigh”) over allegations that the deal would harm regional competition in cement, a key ingredient for concrete production, in violation of the FTC Act and the Clayton Act.
  • The complaint alleges that the proposed acquisition would harm competition in the market for gray portland cement in eastern Pennsylvania and western New Jersey because it would reduce the number of competitors from four to three, resulting in the post-acquisition company controlling more than 50% of cement sales, and also that the acquisition would increase the likelihood of anticompetitive coordination in the regional market. The complaint further alleges that Keystone and Lehigh are close competitors who engaged in price wars that lowered cement prices for their customers, but that the combined company would be in a position to raise prices or reduce output and quality.
  • The complaint’s notice of contemplated relief, in the event that the acquisition is consummated, includes divestiture or reconstitution of assets in a manner that restores two or more independent businesses in the relevant market, among other things.