[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Notices]
[Pages 49343-49350]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24002]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Oldcastle Northeast et al.; Proposed Final
Judgment and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16 (b)-(h), that a proposed Final Judgment,
Stipulation and Order, and Competitive Impact Statement have been filed
with the United States District Court in Connecticut, Civil No.
396CVO1749.
On September 3, 1996, the United States filed a Complaint alleging
that the proposed acquisition by Oldcastle Northeast, Inc. of the stock
of Tilcon, Inc. would violate Section 7 of the Clayton Act, 15 U.S.C.
18. The proposed Final Judgment, filed the same time as the Complaint,
requires Oldcastle Northeast to divest its East Granby, Connecticut
quarry and two three-ton asphalt plants located at the quarry.
Public comment is invited within the statutory 60-day comment
period. Such comments and responses thereto will be published in the
Federal Register and filed with the Court. Comments should be directed
to J. Robert Kramer, Chief, Litigation II Section, Antitrust Division,
United States Department of Justice, 1401 H Street, NW., Suite 3000,
Washington, DC 20530 (telephone: 202/307-0924).
Copies of the Complaint, Stipulation and Order, Proposed Final
Judgment, and Competitive Impact Statement are available for inspection
in Room 215 of the U.S. Department of Justice, Antitrust Division, 325
7th Street, NW., Washington, DC 20530, (202) 514-2841. Copies of these
materials may be obtained upon request and payment of a copying fee.
Constance K. Robinson,
Director of Operations, Antitrust Division.
Stipulation and Order
Civil No.: 396-CV01749
Judge Alfred Covello
It is stipulated by and between the undersigned parties, by their
respective attorneys, that:
1. The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto, and venue of this action is
proper in the District of Connecticut.
2. The parties consent that a Final Judgment in the form hereto
attached may be filed and entered by the Court, upon the motion of any
party or upon the Court's own motion, at any time after compliance with
the requirements of the Antitrust Procedures and Penalties Act (15
U.S.C. 16 (b)-(h)), and without further notice to any party or other
proceedings, provided that the United States has not withdrawn its
consent, which it may do at any time before the entry of the proposed
Final Judgment by serving notice thereof on defendants and by filing
that notice with the Court.
3. The parties shall abide by and comply with the provisions of the
proposed Final Judgment pending entry of the Final Judgment, and from
the date of the filing of this Stipulation, shall comply with all the
terms and provisions of the Final Judgment as though they were in full
force and effect as an order of the Court.
4. In the event plaintiff withdraws its consent, or if the proposed
Final Judgment is not entered pursuant to this Stipulation, this
Stipulation shall be of no effect whatever and the making of this
Stipulation shall be without prejudice to any party in this or any
other proceeding.
Dated:
For Plaintiff, United States:
Anne K. Bingaman,
Assistant Attorney General.
Lawrence R. Fullerton
Charles E. Biggio
Constance K. Robinson
For Defendants, Oldcastle Northeast, Inc. and CRH plc:
John A. Herfort,
Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, New York
10166, (212) 351-3832.
Malcolm R. Pfunder,
Gibson, Dunn & Crutcher LLP, 1050 Connecticut Avenue, NW.,
Washington, DC 20036, (202) 955-8227.
J. Robert Kramer,
Willie L. Hudgins,
Frederick H. Parmenter,
Stephen F. Sonnett,
Arthur A. Feiveson,
Antitrust Division, U.S. Department of Justice, 1401 H Street, NW,
Suite 3000, Washington, DC 20530, (202) 307-5780.
Christopher F. Droney,
United States Attorney.
[[Page 49344]]
By---------------------------------------------------------------------
Carl J. Schuman,
Assistant United States Attorney, Federal Bar No. CT05439.
For Defendants Tilcon, Inc. and BTR plc.
Jack Fornaciari,
Ross & Hardies,
888 16th Street, NW, Suite 400, Washington, DC 20006-4103, (202) 835-
7433.
Richard Blumenthal,
Attorney General of Connecticut.
By---------------------------------------------------------------------
Steven M. Rutstein,
Assistant Attorney General, Attorney General's Office of the State of
Connecticut, Federal Bar No. CT09086.
Order
It is so ordered, this ____rd day of September, 1996.
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United States District Judge
Final Judgment
Civil No.: 396-CV-01749
Judge Alfred Covello
Whereas, plaintiffs, United States of America and the State of
Connecticut, having filed their Complaint herein on September 3, 1996,
and plaintiffs and defendants, by their respective attorneys, having
consented to the entry of this Final Judgment without trial or
adjudication of any issue of fact or law herein, and without this Final
Judgment constituting any evidence against or an admission by any party
with respect to any issue of law or fact herein;
And whereas, defendants have agreed to be bound by the provisions
of this Final Judgment pending its approval by the Court;
And whereas, the essence of this Final Judgment is prompt and
certain divestiture of assets to assure that competition is not
substantially lessened;
And whereas, plaintiffs require defendants to make certain
divestitures for the purpose of establishing a viable competitor in the
manufacture and sale of asphalt concrete in the greater Hartford,
Connecticut area;
And whereas, defendants have represented to plaintiffs that the
divestitures ordered herein can and will be made and that defendants
will later raise no claims of hardship or difficulty as grounds for
asking the Court to modify any of the divestiture provisions contained
below;
Now, therefore, before the taking of any testimony, and without
trial or adjudication of any issue of fact or law herein, and upon
consent of the parties hereto, it is hereby ordered, adjudged, and
decreed as follows:
I
Jurisdiction
This Court has jurisdiction over each of the parties hereto and the
subject matter of this action. The Complaint states a claim upon which
relief may be granted against defendants under Section 7 of the Clayton
Act, as amended (15 U.S.C. 18).
II
Definitions
As used in this Final Judgment:
A. ``Oldcastle'' means defendant Oldcastle Northeast, Inc., a
Delaware corporation headquartered in Washington, D.C., and includes
its successors and assigns, and its subsidiaries, directors, officers,
managers, agents, and employees acting for or on behalf of any of them.
B. ``CRH'' means defendant CRH plc, a company formed under the laws
of the Republic of Ireland headquartered in Dublin (of which Oldcastle
is a subsidiary), and includes its successors and assigns, and its
subsidiaries, directors, officers, managers, agents, and employees
acting for or on behalf of any of them.
C. ``Tilcon'' means defendant Tilcon, Inc., a Delaware corporation
headquartered in New Britain, Connecticut, and includes its successors
and assigns, and its subsidiaries, directors, officers, managers,
agents, and employees acting for or on behalf of any of them.
D. ``BTR'' means defendant BTR plc, a company formed under the laws
of the United Kingdom and headquartered in London (of which Tilcon is a
subsidiary), and includes its successors and assigns, and its
subsidiaries, directors, officers, managers, agents, and employees
acting for or on behalf of any of them.
E. ``Aggregate'' means sand, gravel, and crushed stone produced at
quarries or sand and gravel pits. ``Stone products'' refer to any
products produced at a quarry.
F. ``Asphalt Concrete'' means material that is used principally for
paving and is produced by combining and heating asphalt cement (also
referred to in the industry as ``liquid asphalt'' or ``asphalt oil'')
with aggregate.
G. ``Hot-mix plant'' means a plant that produces asphalt concrete.
H. ``Greater Hartford Area'' refers to the following cities and
towns in Connecticut: Hartford, New Britain, Newington, Wethersfield,
Farmington, West Hartford, Bloomfield, Windsor, South Windsor, East
Hartford, Manchester, Glastonbury, Windsor Locks, East Granby,
Plainville, Rocky Hill, Enfield, Avon, Ellington, and East Windsor.
I. ``Assets to be Divested'' means:
(1) all rights, titles, and interests, including all fee and all
leasehold and renewal rights, in Tilcon's East Granby, Connecticut
quarry located at 60 Main St., East Granby, Connecticut 06026 and the
related maintenance facilities and administration buildings (the ``East
Granby Quarry'') including, but not limited to, all real property,
capital equipment, fixtures, inventories, trucks and other vehicles,
stone crushing equipment, scales, interests, permits, assets or
improvement related to the production, distribution, and sale of
aggregate and stone products at the East Granby Quarry;
(2) all rights, title, and interests, in the two, three-ton, hot-
mix plants located at the East Granby Quarry (the ``Two, Three-Ton,
Hot-Mix Plants''), including, but not limited to, all real property,
capital equipment, fixtures, inventories, trucks and other vehicles,
storage tanks, power supply equipment, scales, interests, permits,
assets or improvements related to the production, distribution, and
sale of asphalt concrete by the two, three-ton, hot-mix plants; and
(3) all intangible assets associated with the East Granby Quarry
and the Two, Three-Ton, Hot-Mix Plants; provided, however, that CRH
will be permitted to retain the name ``Roncari.''
[[Page 49345]]
III
Applicability
A. The provisions of this Final Judgment apply to the defendants,
their successors and assigns, subsidiaries, directors, officers,
managers, agents, and employees, and all other persons in active
concert or participation with any of them who shall have received
actual notice of this Final Judgment by personal service or otherwise.
B. Defendants shall require, as a condition of the sale or other
disposition of all Assets to be Divested, that the purchaser agree to
be bound by the provisions of this Final Judgment.
IV
Divestitures
A. CRH is hereby ordered and directed in accordance with the terms
of this Final Judgment, within one hundred and eighty (180) calendar
days after the filing of this Final Judgment, to divest the Assets to
be Divested to a purchaser.
B. CRH shall use its best efforts to accomplish the divestitures as
expeditiously and timely as possible. The United States in its sole
determination after consultation with Connecticut, may extend the time
period for any divestiture an additional period of time not to exceed
sixty (60) calendar days.
C. In accomplishing the divestitures ordered by this Final
Judgment, CRH promptly shall make known, by usual and customary means,
the availability of the Assets to be Divested described in this Final
Judgment. CRH shall inform any person making an inquiry regarding a
possible purchase that the sale is being made pursuant to this Final
Judgment and provide such person with a copy of this Final Judgment.
CRH shall also offer to furnish to all bona fide prospective
purchasers, subject to customary confidentiality assurances, all
information regarding the Assets to be Divested customarily provided in
a due diligence process except such information subject to attorney-
client privilege or attorney work-product privilege. CRH shall make
available such information to plaintiffs at the same time that such
information is made available to any other person.
D. CRH shall not interfere with any negotiations by any purchaser
to employ any CRH (or former Tilcon) employee who works at, or whose
principal responsibility is the manufacture, sale or marketing of
aggregate, stone products or asphalt concrete produced by the Assets to
be Divested.
E. CRH shall permit prospective purchasers of the Assets to be
Divested to have access to personnel and to make such inspection of the
Assets to be Divested; access to any and all environmental, zoning, and
other permit documents and information; and access to any and all
financial, operational, or other documents and information customarily
provided as part of a due diligence process.
F. CRH shall warrant to the purchaser of the Assets to be Divested
that the Assets to be Divested will be operational on the date of sale.
G. CRH shall warrant to the purchaser of the Assets to be Divested
that there are no known defects in the environmental, zoning, or other
permits pertaining to the operation of the Assets to be Divested and
that the defendants will not undertake following the divestiture of the
Assets to be Divested any challenges to the environmental, zoning, or
other permits pertaining to the operation of the Assets to be Divested.
H. CRH, at its option, may retain ownership of the six-ton, hot-mix
plant and the portland concrete cement plant located at the East Granby
Quarry. The six-ton, hot-mix plant and the portland concrete cement
plant (``Retained Plants'') must be operated independent of the
purchaser's operation of the Assets to be Divested. For the purpose of
siting and operating the plants, CRH may negotiate separate easements
and licenses for the Retained Plants, including the land underlying and
at reasonable distance surrounding the Retained Plants. If CRH or a
subsequent purchaser removes or discontinues the operations of either
of the Retained Plants for more than two years, the easement and
license associated with the plant will be voided. The easements and
licenses that are retained for the siting and operation of the six-ton,
hot-mix plant and the portland cement plant must not hinder the
purchaser's operation of the Assets to be Divested.
I. CRH, at its option, may negotiate a supply agreement with the
purchaser of the Assets to be Divested for the purpose of supplying CRH
with aggregate and stone products produced at the East Granby Quarry.
The sale of the Assets to be Divested shall not be conditioned on CRH's
ability to obtain a supply agreement with the purchaser.
J. Unless the United States, after consultation with the State of
Connecticut, otherwise consents in writing, the divestiture pursuant to
Section IV, or by trustee appointed pursuant to Section V of this Final
Judgment, shall include the Assets to be Divested and be accomplished
by selling or otherwise conveying the Assets to be Divested to a
purchaser in such a way as to satisfy the plaintiffs, in their sole
discretion, that the Assets to be Divested can and will be used by the
purchaser as part of a viable, ongoing business or businesses engaged
in the manufacture and sale of asphalt concrete, aggregate, and stone
products. The divestiture, whether pursuant to Section IV of Section V
of this Final Judgment, shall be made to a purchaser or purchasers for
whom it is demonstrated to plaintiffs' sole satisfaction that: (1) The
purchaser has the capability and intent of competing effectively in the
manufacture and sale of asphalt concrete in the greater Hartford Area;
(2) the purchaser has or soon will have the managerial, operation, and
financial capability to compete effectively in the manufacture and sale
of asphalt concrete in the greater Hartford Area; and (3) none of the
terms of any agreement between the purchaser and CRH give CRH the
ability unreasonably to raise the purchaser's costs, to lower the
purchaser's efficiency, or otherwise to interfere in the ability of the
purchaser to compete effectively in the greater Hartford Area.
V
Appointment of Trustee
A. In the event that CRH has not divested the Assets to be Divested
within the time specified in Section IV (A) and (B) of this Final
Judgment, the Court shall appoint, on application of the United States,
a trustee selected by the United States to effect the divestiture of
the Assets to be Divested.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to sell the Assets to be Divested
described in Section II of this Final Judgment. The trustee shall have
the power and authority to accomplish the divestiture at the best price
then obtainable upon a reasonable effort by the trustee, subject to the
provisions of Sections V and VI of this Final Judgment, and shall have
such other powers as the Court shall deem appropriate. Subject to
Section V(C) of this Final Judgment, the trustee shall have the power
and authority to hire at the cost and expense of Olkdcastle any
investment bankers, attorneys, or other agents reasonably necessary in
the judgment of the trustee to assist in the divestiture, and such
professionals and agents shall be accountable solely to the trustee.
The trustee shall have the power and authority to accomplish the
divestiture at the earliest possible time to a purchaser acceptable to
plaintiffs, and shall have such other powers at this Court shall deem
appropriate. CRH shall not object to a sale by the trustee on any
[[Page 49346]]
grounds other than the trustee's malfeasance. Any such objections by
CRH must be conveyed in writing to the plaintiffs and the trustee
within ten (10) calendar days after the trustee has provided the notice
required under Section VI of this Final Judgment.
C. The trustee shall serve at the cost and expense of CRH, on such
terms and conditions as the Court may prescribe, and shall account for
all monies derived from the sale of the assets sold by the trustee and
all costs and expenses so incurred. After approval by the Court of the
trustee's accounting, including fees for its services and those of any
professionals and agents retained by the trustee, all remaining money
shall be paid to CRH and the trust shall then be terminated. The
compensation of such trustee and of any professionals and agents
retained by the trustee shall be reasonable in light of the value of
the Assets to be Divested and based on a fee arrangement providing the
trustee with an incentive based on the price and terms of the
divestiture and the speed with which it is accomplished.
D. CRH shall use its best efforts to assist the trustee in
accomplishing the required divestiture. The trustee and any
consultants, accountants, attorneys, and other persons retained by the
trustee shall have full and complete access to the personnel, books,
records, and facilities of CRH and CRH shall develop financial or other
information relevant to the Assets to be Divested as the trustee may
reasonably request, subject to reasonable protection for trade secrets
or other confidential research, development, or commercial information.
CRH shall take no action to interfere with or to impede the trustee's
accomplishment of the divestiture.
E. After its appointment, the trustee shall file monthly reports
with the parties and the Court setting forth the trustee's efforts to
accomplish the divestiture ordered under this Final Judgment. If the
trustee has not accomplished such divestiture within six (6) months
after its appointment, the trustee thereupon shall file promptly with
the Court a report setting forth (1) the trustee's efforts to
accomplish the required divestiture, (2) the reasons, in the trustee's
judgment, why the required divestiture has not been accomplished, and
(3) the trustee's recommendations; provided, however, that to no extent
such report contains information that the trustee deems confidential,
such reports shall not be filed in the public docket in the Court. The
trustee shall at the same time furnish such reports to the parties, who
shall each have right to be heard and to make additional
recommendations consistent with the purpose of the trust. The Court
shall enter thereafter such orders as it shall deem appropriate in
order to carry out the purpose of the trust, which may, if necessary,
include extending the trust and the term of the trustee's appointment
by a period requested by the United States.
VI
Notification
Within two (2) business days following execution of a definitive
agreement, contingent upon compliance with the terms of this Final
Judgment, to effect, in whole or in part, any proposed divestiture
pursuant to Sections IV or V of this Final Judgment, CRH or the
trustee, whichever is then responsible for effecting the divestiture,
shall notify plaintiffs of the proposed divestiture. If the trustee is
responsible, it shall, similarly notify CRH. The notice shall set forth
the details of the proposed transaction and list the name, address, and
telephone number of each person not previously identified who offered
to, or expressed an interest in or a desire to, acquire any ownership
interest in the assets that are the subject of the binding contract,
together with full details of same. Within fifteen (15) calendar days
of receipt by plaintiff of such notice, plaintiffs may request from
CRH, the proposed purchaser, or any other third party additional
information concerning the proposed divestiture and the proposed
purchaser. CRH and the trustee shall furnish any additional information
requested within fifteen (15) calendar days of the receipt of the
request, unless the parties shall otherwise agree. Within thirty (30)
calendar days after receipt of the notice or within twenty (20)
calendar days after plaintiffs have been provided the additional
information requested from CRH, the proposed purchaser, and any third
party, whichever is later, plaintiffs shall provide written notice to
CRH and the trustee, if there is one, stating whether or not it objects
to the proposed divestiture. If plaintiffs provide written notice to
CRH and the trustee that it does not object, then the divestiture may
be consummated, subject to CRH's limited right to object to the sale
under Section V(B) of this Final Judgment. Absent written notice that
plaintiffs do not object to the proposed purchaser or upon objection by
plaintiffs, a divestiture proposed under Section IV shall not be
consummated. Upon objection by plaintiffs, or by CRH under the proviso
in Section V(B), a divestiture proposed under Section V shall not be
consummated unless approved by the Court.
VII
Affidavits
A. Within twenty (20) calendar days of the filing of this Final
Judgment and every thirty (30) calendar days thereafter until the
divestitures have been completed whether pursuant to Section IV or
Section V of this Final Judgment, CRH shall deliver to plaintiffs an
affidavit as to the fact and manner of compliance with Sections IV or V
of this Final Judgment. Each such affidavit shall include, inter alia,
the name, address, and telephone number of each person who, at any time
after the period covered by the last such report, made an offer to
acquire, expressed an interest in acquiring, entered into negotiations
to acquire, or was contacted or made an inquiry about acquiring, any
interest in the Assets to be Divested, and shall describe in detail
each contract with any such person during that period. Each such
affidavit shall further describe in detail any negotiations regarding a
supply agreement to supply CRH with aggregate and stone products from
the East Granby Quary and terms regarding CRH's operation and siting of
the Retained Plants at the East Granby Quary as described in Section
IV(H) of this Final Judgment.
B. Within twenty (20) calendar days of the filing of this Final
Judgment, CRH shall deliver to plaintiffs an affidavit which describes
in detail all actions CRH has taken and all steps CRH has implemented
on an on-going basis to preserve the Assets to be Divested pursuant to
Section VIII of this Final Judgment and describes the functions, duties
and actions taken by or undertaken at the supervision of the
individual(s) described at Section VIII(F) of the Final Judgment with
respect to CRH's efforts to preserve the Assets to be Divested. The
affidavit also shall describe, but not be limited to, CRH's efforts to
maintain and operate the Assets to be Divested as an active competitor,
maintain the management, sales, marketing and pricing of the Assets to
be Divested, and maintain the Assets to be Divested in operable
condition at current capacity configurations. CRH shall deliver to
plaintiff an affidavit describing any changes to the efforts and
actions outlined in CRH's earlier affidavit(s) filed pursuant to this
Section within fifteen (15) calendar days after the change is
implemented.
C. CRH shall preserve all records of all efforts made to preserve
and divest the Assets to be Divested.
[[Page 49347]]
VIII
Preservation of Assets
Until the divestitures required by the Final Judgment have been
accomplished:
A. CRH shall take all steps necessary to ensure that the Assets to
be Divested will be maintained and operated as an independent, ongoing,
economically viable and active competitor in the production and sale of
asphalt concrete, aggregate, and stone products in the greater Hartford
Area.
B. CRH shall use all reasonable efforts to maintain sales at the
Assets to be Divested and shall maintain at 1995 or previously approved
levels, whichever are higher, promotional, advertising, sales,
marketing and merchandising support for asphalt concrete, aggregate,
and stone products sold from the Assets to be Divested. CRH's sales and
marketing employees responsible for sales from the Assets to be
Divested shall not be transferred or reassigned to other quarries or
hot-mix plants of CRH.
C. CRH shall take all steps necessary to ensure that the Assets to
be Divested are fully maintained in operable condition at no lower than
their current rated capacity configurations, and shall maintain and
adhere to normal maintenance schedules for the Assets to be Divested.
D. CRH shall not, except as part of a divestiture approved by
plaintiffs, remove, sell or transfer any of the Assets to be Divested,
including all permits that relate to the operation of the Assets to be
Divested, other than asphalt concrete, aggregate, and stone products
sold in the ordinary course of business.
E. CRH shall not encumber the Assets to be Divested.
F. CRH shall appoint a person or persons to oversee the Assets to
be Divested who will be responsible for CRH's compliance with Section
VIII of this Final Judgment.
IX
Future Acquisitions
A. CRH is ordered to give forty-five (45) days notice for any
transactions not reportable under the Hart Scott Rodino Antitrust
Improvements Act, 15 U.S.C. 18a, to the U.S. Department of Justice,
Antitrust Division and the Connecticut Attorney General's Office
concerning any intent to acquire ownership or control of the stock or
assets of any manufacturer of asphalt concrete or quarry operator
within a twenty-five (25) mile radius of Hartford, Connecticut. For all
transactions concerning any intent to acquire ownership or control of
the stock or assets of any manufacturer of asphalt concrete or quarry
operator within a twenty-five (25) mile radius of Hartford,
Connecticut, that are reportable under 15 U.S.C. 18a, CRH is ordered to
supply duplicate filings to the Connecticut Attorney General's Office.
X
Compliance Inspection
Only for the purposes of determining or securing compliance with
the Final Judgment and subject to any legally recognized privilege,
from time to time:
A. Duly authorized representatives of the United States Department
of Justice, upon written request of the Attorney General or of the
Assistant Attorney General in charge of the Antitrust Division, or duly
authorized representatives of the Attorney General's Office of the
State of Connecticut, and on reasonable notice to CRH made to its
principal offices (which includes Oldcastle's offices), shall be
permitted:
(1) Access during office hours of CRH to inspect and copy all
books, ledgers, accounts, correspondence, memoranda, and other records
and documents in the possession or under the control of CRH, who may
have counsel present, relating to enforcement of this Final Judgment;
and
(2) Subject to the reasonable convenience of CRH and without
restraint or interference from it, to interview its officers,
employees, and agents, who may have counsel present, regarding any such
matters.
B. Upon the written request of the Attorney General or of the
Assistant Attorney General in charge of the Antitrust Division or duly
authorized individuals of the Attorney General's Office of the State of
Connecticut, made to CRH's principal offices (which includes
Oldcastle's principal offices), CRH shall submit such written reports,
under oath if requested, with respect to enforcement of this Final
Judgment.
C. No information or documents obtained by the means provided in
Section X of this Final Judgment shall be divulged by a representative
of plaintiffs to any person other than a duly authorized representative
of the Executive Branch of the United States or an authorized
representative of the Attorney General's Office of the State of
Connecticut, except in the course of legal proceedings to which the
United States or the State of Connecticut is a party (including grand
jury proceedings), or for the purpose of securing compliance with this
Final Judgment, or as otherwise required by law.
D. If at the time information or documents are furnished by CRH to
plaintiffs, the CRH represents and identifies in writing the material
in any such information or documents to which a claim of protection may
be asserted under Rule 26(c)(7) of the Federal Rules of Civil
Procedure, and CRH marks each pertinent page of such material,
``Subject to claim of protection under Rule 26(c)(7) of the Federal
Rules of Civil Procedure,'' then ten (10) calendar days notice shall be
given by plaintiffs to CRH prior to divulging such material in any
legal proceeding (other than a grand jury proceeding).
XI
Retention of Jurisdiction
Jurisdiction is retained by this Court for the purpose of enabling
any of the parties to this Final Judgment to apply to this Court at any
time for such further orders and directions as may be necessary or
appropriate for the construction or carrying out of this Final
Judgment, for the modification of any of the provisions hereof, for the
enforcement of compliance herewith, and for the punishment of any
violations hereof.
XII
Termination
Unless this Court grants an extension, this Final Judgment will
expire on the tenth anniversary of the date of its entry.
XIII
Public Interest
Entry of this Final Judgment is in the public interest.
Dated:-----------------------------------------------------------------
----------------------------------------------------------------------
United States District Judge
Competitive Impact Statement
Civil Action No.: 396CV01749 AWT
Filed: September 3, 1996.
The United States, pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (``APPA''), 15 U.S.C. 16 (b)-(h), files
this Competitive Impact Statement relating to the proposed Final
Judgment submitted for entry in this civil antitrust proceeding.
I
Nature and Purpose of the Proceeding
On September 3, 1996, the United States filed a civil antitrust
Complaint, which alleges that the proposed acquisition by CRH plc
(``CRH'') through Oldcastle Northeast, Inc. (``Oldcastle''), of Tilcon,
Inc. from BTR plc would violate Section 7 of the Clayton Act, 15 U.S.C.
18. The Complaint alleges that
[[Page 49348]]
the combination of the two most significant competitors in the asphalt
concrete market in the greater Hartford, Connecticut area would lessen
competition substantially in the production and sale of asphalt
concrete in the greater Hartford area. As defined in the Complaint, the
greater Hartford area includes the following cities and towns in
Connecticut: Hartford, New Britain, Newington, Wethersfield,
Farmington, West Hartford, Bloomfield, Windsor, South Windsor, East
Hartford, Manchester, Glastonbury, Windsor Locks, East Granby,
Plainville, Rocky Hill, Enfield, Avon, Elligton, and East Windsor. The
prayer for relief in the Complaint seeks: (1) A judgment that the
proposed acquisition would violate Section 7 of the Clayton Act; and
(2) a permanent injunction preventing CRH from acquiring control of
Tilcon's asphalt concrete business, or otherwise combining such
business with Oldcastle's own business in the United States.
When the Complaint was filed, the United States also filed a
proposed settlement that would permit CRH to complete its acquisition
of Tilcon's asphalt concrete business, but require certain divestitures
that will preserve competition in the greater Hartford area. This
settlement consists of a Stipulation and Order and a proposed Final
Judgment.
The proposed Final Judgment orders CRH to divest Tilcon's East
Granby, Connecticut quarry and two of the three, hot-mix asphalt plants
located at the East Granby quarry and certain related tangible and
intangible assets. CRH must complete the divestiture of these plants
and related assets within one hundred and eighty (180) calendar days
after the date on which the proposed Final Judgment was filed (i.e.,
September 3, 1996), in accordance with the procedures specified
therein.
The Stipulation and Order and proposed Final Judgment require CRH
to ensure that, until the divestitures mandated by the proposed Final
Judgment have been accomplished, the East Granby quarry and the two
hot-mix asphalt plants and related assets to be divested will be
maintained and operated as an independent, ongoing, economically viable
and active competitor. CRH must preserve and maintain the quarry and
the two hot-mix asphalt concrete plants to be divested as saleable and
economically viable, ongoing concerns, with competitively sensitive
business information and decision-making divorced from that of
Oldcastle's asphalt concrete business. CRH will appoint a person or
persons to monitor and ensure its compliance with these requirements of
the proposed Final Judgment.
The United States and defendants have stipulated that the proposed
Final Judgment may be entered after compliance with the APPA. Entry of
the proposed Final Judgment would terminate this action, except that
the Court would retain jurisdiction to construe, modify, or enforce the
provisions of the proposed Final Judgment and to punish violations
thereof.
II
Description of the Events Giving Rise to the Alleged Violation
A. Oldcastle, Tilcon and the Proposed Transaction
Through its wholly owned subsidiary, Oldcastle, CRH is engaged in
the business of manufacturing and selling asphalt concrete and
extracting and processing aggregate in the state of Connecticut. In the
greater Hartford area, Oldcastle operates three hot-mix plants that
produce asphalt concrete and a quarry that produces aggregate which is
used for, among other things, manufacturing asphalt concrete at the
three hot-mix plants. In 1995, Oldcastle had sales of $314 million.
Through its wholly owned subsidiary, Tilcon, BTR is engaged in the
business of manufacturing and selling asphalt concrete and extracting
and processing aggregate in the state of Connecticut. In the greater
Hartford area, Tilcon operates six hot-mix plants that produce asphalt
concrete and two quarries that produce aggregate which is used for,
among other things, manufacturing asphalt concrete at the six hot-mix
plants. In 1995, Tilcon had sales of $349 million.
On June 19, 1996, CRH, through Oldcastle, agreed to acquire all of
the outstanding voting securities of Tilcon from BTR for a purchase
price of $270 million. This transaction, which would take place in the
highly concentrated greater Hartford area asphalt concrete
manufacturing industry, precipitated the government's suit.
B. The Transaction's Effects in the Greater Hartford Area
The Complaint alleges that the manufacture and sale of asphalt
concrete constitutes a line of commerce, or relevant product market,
for antitrust purposes, and that the greater Hartford area constitutes
a section of the country, or relevant geographic market. The Complaint
alleges the effect of Oldcastle's acquisition may be to lessen
competition substantially in the manufacture and sale of asphalt
concrete in the greater Hartford area.
Asphalt concrete is material that is used principally for paving
and is produced by combining and heating asphalt cement (also referred
to in the industry as ``liquid asphalt'' or ``asphalt oil'') with
aggregate. A plant that produces asphalt concrete is commonly referred
to as a ``hot-mix plant.'' No good economic functional substitutes
exist for asphalt concrete. Manufacturers and buyers of asphalt
concrete and other paving materials recognize asphalt as a distinct
product.
Manufacturers of asphalt located in the greater Hartford area sell
and compete with each other for sales of asphalt concrete within the
greater Hartford area. Due to high transportation costs and long
delivery time, manufacturers of asphalt concrete located outside the
greater Hartford area do not sell a significant amount of asphalt
concrete for use within the greater Hartford area.
The Complaint alleges that Oldcastle's acquisition of Tilcon would
substantially lessen competition for the manufacture and sale of
asphalt concrete in the greater Hartford area. Actual and potential
competition between Oldcastle and Tilcon for the manufacture and sale
of asphalt concrete in the greater Hartford area will be eliminated.
Oldcastle and Tilcon are the largest producers of asphalt concrete
in the greater Hartford area and are the only producers of asphalt
concrete in the greater Hartford area that own their own sources of
aggregate for manufacturing asphalt concrete for highway projects. They
are also the only manufacturers of asphalt concrete located in the
greater Hartford area that supply asphalt concrete for highway
construction projects built by the Connecticut Department of
Transportation in the greater Hartford area. The Connecticut Department
of Transportation is the largest purchaser of asphalt concrete in the
greater Hartford area.
The acquisition would create a dominant asphalt concrete company in
the greater Hartford area. It would reduce the number of competitors
operating hot-mix plants in the greater Hartford area from three to two
and reduce the number of competitors located in the greater Hartford
area supplying asphalt concrete construction projects built by the
Connecticut Department of Transportation in the greater Hartford area
from two to one.
As a result of the acquisition, prices for asphalt concrete in the
greater Hartford area are likely to increase. Oldcastle would control
the asphalt
[[Page 49349]]
concrete market in the greater Hartford area, and it would have market
power to increase the price of asphalt concrete in the greater Hartford
area. In response to an increase, purchasers could not switch to
another producer of asphalt concrete. The only alternative manufacturer
of asphalt concrete in the greater Hartford area (Sales Construction)
would have its only source of aggregate in the greater Hartford area
controlled by Oldcastle.
New entry in the greater Hartford area is unlikely to restore the
competition lost through Oldcastle's removal of Tilcon from the
marketplace. De novo entry into the manufacture and sale of asphalt
concrete requires a significant capital investment and likely would
take over two years before any new hot-mix asphalt plant could begin
production. Connecticut zoning provisions make it very difficult to
open a quarry in the greater Hartford area, and none have been opened
in fifty years.
C. Harm to Competition as a Consequence of the Acquisition
The Complaint alleges that the transaction would have the following
effects, among others: Competition for the manufacture and sale of
asphalt concrete in the greater Hartford area will be substantially
lessened; actual and potential competition between Oldcastle and Tilcon
in the manufacture and sale of asphalt concrete in the greater Hartford
area will be eliminated; and prices for asphalt concrete in the greater
Hartford area are likely to increase above competitive levels.
III
Explanation of the Proposed Final Judgment
The proposed Final Judgment would preserve competition in the
production and sale of asphalt concrete in the greater Hartford area by
placing in independent hands the East Granby quarry and two of the
three hot-mix asphalt plants used by Tilcon to serve the greater
Hartford area, thus maintaining the existing level of suppliers in the
market place. The two asphalt plants required to be divested by CRH
have a combined capacity of six tons and account for half of the
asphalt capacity at East Granby. Oldcastle would be permitted to retain
a separate six ton asphalt plant at the East Granby location. In
response to a price increase from Oldcastle, purchasers would be able
to turn to one or more producers with (1) significant capacity to
produce asphalt concrete in the greater Hartford area and (2) an
independent source for aggregate in the greater Hartford area for use
in manufacturing asphalt concrete in the greater Hartford area.
Within one hundred and eighty (180) calendar days after filing the
proposed Final Judgment, CRH must divest its East Granby quarry and the
two hot-mix asphalt plants, all located in the East Granby,
Connecticut, and related assets. CRH, at its option, may negotiate a
supply agreement for the purpose of supplying CRH with aggregate and
stone products produced at the East Granby quarry, but such a supply
agreement cannot be a condition for divestiture. The East Granby quarry
and two hot-mix asphalt plants and related assets will be sold to one
or more purchasers who demonstrate to the sole satisfaction of the
United States that they will be an economically viable and effective
competitor, capable of competing effectively in the manufacture and
sale of asphalt concrete in the greater Hartford area.
Until the ordered divestitures take place, CRH must take all
reasonable steps necessary to accomplish the divestitures, and
cooperate with any prospective purchaser. If CRH does not accomplish
the ordered divestitures within the specified one hundred and eighty
(180) calendar days which may be extended by up to sixty (60) calendar
days by the United States in its sole discretion, the proposed Final
Judgment provides for procedures by which the Court shall appoint a
trustee to complete the divestitures. CRH must cooperate fully with the
trustee.
If a trustee is appointed, the proposed Final Judgment provides
that CRH will pay all costs and expenses of the trustee. The trustee's
compensation will be structured so as to provide an incentive for the
trustee to obtain the highest price for the assets to be divested, and
to accomplish the divestiture as quickly as possible. After the
effective date of his or her appointment, the trustee shall serve under
such other conditions as the Court may prescribe. After his or her
appointment becomes effective, the trustee will file monthly reports
with the parties and the Court, setting forth the trustee's efforts to
accomplish the divestiture. At the end of six (6) months, if the
divestiture has not been accomplished, the trustee shall file promptly
with the Court a report that sets forth the trustee's efforts to
accomplish the divestiture, explains why the divestiture has not been
accomplished, and makes any recommendations. The trustee's report will
be furnished to the parties and shall be filed in the public docket,
except to the extent the report contains information the trustee deems
confidential. The parties each will have the right to make additional
recommendations to the Court. The Court shall enter such orders as it
deems appropriate to carry out the purpose of the trust.
IV
Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act (15 U.S.C. 15) provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may being suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorney's fees. Entry of the proposed Final Judgment neither will
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C.
16(a)), the proposed Final Judgment as a no prima facie effect in any
subsequent private lawsuit that may be brought against CRH, Oldcastle,
BTR or Trilcon.
V
Procedures Available for Modification of the Proposed Final Judgment
The United States and the defendants have stipulated that the
proposed Final Judgment may be entered by the Court after compliance
with the provisions of the APPA, provided that the United States has
not withdrawn its consent. The APPA conditions entry upon the Court's
determination that the proposed Final Judgment is in the public
interest.
The APPA provides a period of at least sixty (60) days preceding
the effective date of the proposed Final Judgment within which any
person may submit to the United States written comments regarding the
proposed Final Judgment. Any person should comment within sixty (60)
days of the date of publication of this Competitive Impact Statement in
the Federal Register. The United States will evaluate and respond to
the comments. All comments will be given due consideration by the
Department of Justice, which remains free to withdraw its consent to
the proposed Final Judgment at any time prior to entry. The comments
and the response of the United States will be filed with the Court and
published in the Federal Register.
Written comments should be submitted to: J. Robert Kramer, Chief,
Litigation II Section, Antitrust Division, United States Department of
Justice, 1401 H Street, N.W., Suite 3000 Washington, DC., 20530.
The proposed Final Judgment provides that the Court retains
[[Page 49350]]
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.
VI
Alternatives to the Proposed Final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, a full trial on the merits of its Complaint against the
defendants. The United States is satisfied, however, that the
divestiture of the assets and other relief contained in the proposed
Final Judgment will preserve viable competition in the manufacture and
sale of asphalt concrete in the greater Hartford areas that otherwise
would be affected adversely by the acquisition. Thus, the proposed
Final Judgment would achieve the relief the government would have
obtained through litigation, but avoid the time, expense and
uncertainty of a full trial on the merits of the government's
Complaint.
VII
Standard of Review Under the APPA for Proposed Final Judgment
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a sixty (60) day
comment period, after which the court shall determine whether entry of
the proposed Final Judgment ``is in the public interest.'' In making
that determination, the court may consider--
(1) The competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration or relief sought, anticipated effects of
alternative remedies actually considered, and any other
considerations bearing upon the adequacy of such judgment;
(2) The impact of entry of such judgment upon the public
generally and individuals alleging specific injury from the
violations set forth in the complaint including consideration of the
public benefit, if any, to be derived from a determination of the
issues at trial.
15 U.S.C. 16(e) (emphasis added). As the Court of Appeals for the
District of Columbia Circuit recently held, the APPA permits a court to
consider, among other things, the relationship between the remedy
secured and the specific allegations set forth in the government's
complaint, whether the decree is sufficiently clear, whether
enforcement mechanisms are sufficient, and whether the decree may
positively harm third parties. See United States v. Microsoft, 56 F.3d
1448 (D.C. Cir. 1995).
In conducting this inquiry, ``the Court is nowhere compelled to go
to trial or to engage in extended proceedings which might have the
effect of vitiating the benefits of prompt and less costly settlement
through the consent decree process.'' 119 Cong. Rec. 24598 (1973).
Rather,
absent a showing of corrupt failure of the government to discharge
its duty, the Court, in making its public interest finding, should *
* * carefully consider the explanations of the government in the
competitive impact statement and its responses to comments in order
to determine whether those explanations are reasonable under the
circumstances.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. (CCH)
para. 61,508, at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083
(1981); see also Microsoft, 56 F.3d 1448 (D.C. Cir. 1995). Precedent
requires that:
the balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The court is required to determine not whether a
particular decree is the one that will best serve society, but
whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.
United States v. Bechtel, 648 F.2d 660, 666 (9th Cir. 1981) (emphasis
added).
The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetitive effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a final
judgment requires a standard more flexible and less strict than the
standard required for a finding of liability. ``[A] proposed decree
must be approved even if it falls short of the remedy the court would
impose on its own, as long as it falls within the range of
acceptability or is `within the reaches of public interest.' ''
(citations omitted). United States v. American Tel. and Tel. Co., 552
F. Supp. 131, 150 (D.D.C. 1982), aff'd sub nom., Maryland v. United
States, 460 U.S. 1001 (1983).
VIII
Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Executed on: September 5, 1996.
Respectfully submitted,
Frederick H. Parmenter,
Attorney, Department of Justice, Antitrust Division, Suite 3000, 1401 H
Street, NW, Washington, DC 20530, (202) 307-0620.
Carl J. Schuman,
Assistant United States Attorney, Federal Bar No. CT 05439.
[FR Doc. 96-24002 Filed 9-18-96; 8:45 am]
BILLING CODE 4410-01-M