[Federal Register Volume 62, Number 110 (Monday, June 9, 1997)]
[Notices]
[Pages 31456-31462]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14933]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Martin Marietta Materials, Inc. 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. Sec. 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 the Southern 
District of Indiana, in United States versus Martin Marietta Materials, 
Inc., et al, Civil No. IP97-854C-T/G.
    On May 27, 1997, the United States filed a Complaint alleging that 
the proposed acquisition by Martin Marietta of the stock of American 
Aggregates would violate Section 7 of the Clayton Act, 15 U.S.C. 
Sec. 18. The proposed Final Judgment, filed the same time as the 
Complaint, requires Martin Marietta to divest the Harding Street, 
Indianapolis, Indiana aggregate quarry and related assets that it will 
obtain in connection with the acquisition of American Aggregates.
    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, N.W., Suite 3000, 
Washington, D.C. 20530 (telephone: 202/307-0924).
Constance K. Robinson,
Director of Operations.

United States District Court for the Southern District of Indiana

Stipulation and Order

    United States of America, Plaintiff, v. Martin Marietta 
Materials, Inc.; CSR Limited; CSR America, Inc.; and American 
Aggregates Corporation, Defendants. Civil No.: IP97-854C-T/G; Filed: 
5/27/97; Judge John Daniel Tinder.

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, as follows:
    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 United States District Court for the Southern District of 
Indiana.
    2. The parties stipulate 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. Sec. 16), and without further notice to any party or other 
proceedings, provided that the plaintiff 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. Defendants shall abide by and comply with the provisions of the 
proposed Final Judgment pending entry of the Final Judgment or until 
expiration of time for all appeals of any court ruling declining entry 
of the proposed Final Judgment, and shall, from the date of the signing 
of this Stipulation, 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. This Stipulation shall apply with equal force and effect to any 
amended proposed Final Judgment agreed upon in writing by the parties 
and submitted to the Court.
    5. In the event (a) the plaintiff has withdrawn its consent, as 
provided in paragraph 2 above, or (b) the proposed Final Judgment is 
not entered pursuant to this Stipulation, the time has expired for all 
appeals of any Court ruling declining entry of the proposed Final 
Judgment, and the Court has not otherwise ordered continued compliance 
with the terms and provisions of the proposed Final Judgment, then the 
parties are released from all further obligations under this 
Stipulation, and the making of this Stipulation shall be without 
prejudice to any party in this or any other proceeding.
    6. Defendants represent that the divestiture ordered in the 
proposed Final Judgment can and will be made, and that the defendants 
will later raise no claim of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
therein.

    Dated: May 23, 1997.

For Plaintiff United States

Frederick H. Parmenter,


[[Page 31457]]


U.S. Department of Justice, Antitrust Division, Litigation II 
Section, Suite 3000, Washington, D.C. 20005, (202) 307-0620.

Judith A. Stewart,

United State Attorney.

Harold R. Bickham,

Assistant United States Attorney, Southern District of Indiana.

For Defendant Martin Marietta Materials, Inc.

Raymond A. Jacobsen, Jr.,

McDermott, Will & Emery, 1850 K Street, N.W., Washington, D.C. 
20006-2296, (202) 778-8028.

Scott Megregian,

McDermott, Will & Emery, 1850 K Street, N.W., Washington, D.C. 
20006-2296, (202) 778-8096.

For Defendants CSR Limited, CSR America, Inc. and American Aggregates 
Corporation

C. Benjamin Crisman, Jr.,

Skadden, Arps, Slate, Meagher & Flom, 1440 New York Avenue, N.W., 
Washington, D.C. 20005-2111, (202) 371-7330.

Alec Y. Chang,

Skadden, Arps, Slate, Meagher & Flom, 1440 New York Avenue, N.W., 
Washington, D.C. 20005-2111.

Order

    It is so ordered, this 27th day of May, 1997.

Sarah Evans Baker,

United States District Judge.

Final Judgment

    Whereas, plaintiff, the United States of America, having filed its 
Complaint herein on May 22, 1997, and plaintiff 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, plaintiff requires defendants to make certain 
divestitures for the purpose of establishing a viable competitor in the 
production and sale of aggregate in Marion County, Indiana;
    And Whereas, defendants have represented to the plaintiff 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. Sec. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Martin'' means defendant Martin Marietta Materials, Inc., a 
North Carolina corporation headquartered in Raleigh, North Carolina, 
and includes its successors and assigns, and its subsidiaries, 
directors, officers, managers, agents, and employee acting for or on 
behalf of any of them.
    B. ``American Aggregates'' means defendant American Aggregates 
Corporation, a Delaware corporation headquartered in Dayton, Ohio, and 
includes it successors and assigns, and its subsidiaries, directors, 
officers, managers, agents, and employees acting for or on behalf of 
any them.
    C. ``CSR America'' means defendant CSR America, Inc., a Georgia 
corporation headquarters in Atlanta, Georgia (of which American 
Aggregates 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.
    D. ``CSR'' means defendant CSR Limited, a company formed under the 
laws of Australia and headquarters in Sydney, New South Wales (of which 
CSR America 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 crushed stone and gravel produced at 
quarries, mines, or gravel pits used to manufacture asphalt concrete 
and ready mix concrete. ``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. ``Ready mix concrete'' means a material used in the construction 
of buildings, highways, bridges, tunnels, and other products and is 
produced by mixing a cementing material (commonly portland cement) and 
aggregate with sufficient water to cause the cement to set and bind.
    H. ``Marion County'' refers to Marion County, Indiana. 
Indianapolis, Indiana is located in Marion County.
    I. Unless otherwise agreed to by the Department of Justice, in its 
sole discretion. ``Assets to be Divested'' means:
    (1) All rights, titles, and interests, including all fee and all 
leasehold and rights, in American Aggregates' Harding Street, 
Indianapolis, Indiana quarry located at 4200 South Harding Street, 
Indianapolis, Indiana 46217, and the related maintenance facilities and 
administration buildings (the ``Harding Street Quarry'') including, but 
not limited to, all real property, capital equipment, fixtures, 
inventories, trucks, and other vehicles, stone crushing equipment, 
power supply equipment, scales, interests, permits, assets or 
improvement related to the production, distribution, and safe of 
aggregate and stone products at the Harding Street Quarry; and
    (2) All intangible assets, including customer lists, contracts to 
supply third parties aggregate and stone products, and contracts 
permitting third parties to operate hot-mix plants and concrete plants 
at the Harding Street Quarry, associated with the Harding Street 
Quarry.

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 person 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. Divestiture

    A. Martin 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, or five (5) days 
after its entry by the Court, whichever is later, to divest the Assets 
to be Divested to a purchaser acceptable to the plaintiff, in its sole 
discretion.
    B. Martin shall use its best efforts to accomplish the divestiture 
as expeditiously and timely as possible. The United States in its sole 
determination may extend the time period for any divestiture an 
additional

[[Page 31458]]

period of time not to exceed sixty (60) calendar days.
    C. In accomplishing the divestitures ordered by this Final 
Judgment, Martin promptly shall make known, by usual and customary 
means, the availability of the Assets to be Divested described in this 
Final Judgment. Martin 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. Martin shall also offer to furnish to all bona fide 
prospective purchasers, subject to customary confidentiality 
assurances, all information regarding the Assets to be invested 
customarily provided in a due diligence process except such information 
subject to attorney-client privilege or attorney work-product 
privilege. Martin shall make available such information to the 
plaintiff at the same time that such information is made available to 
any other person.
    D. Martin shall not interfere with any negotiations by any 
purchaser to employ any Martin (or former CSR, CSR America, or American 
Aggregates) employee who works at, or whose principal responsibility is 
the manufacture, sale or marketing of aggregate or stone products 
produced by the Assets to be Divested.
    E. Martin 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, operations, or other documents and information customarily 
provided as part of a due diligence process.
    F. Martin 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. Martin shall not take any action, direct or indirect (not 
including otherwise lawful competitive price action, expansion of 
capacity or similar competitive conduct), that will impede in any way 
the operation of the Harding Street Quarry.
    H. Martin 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 Martin will not undertake, directly or indirectly, 
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.
    I. Unless the United States 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 
plaintiff, in its 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 aggregate, and 
stone products. The divestiture, whether pursuant to Section IV or 
Section V of this Final Judgment, shall be made to a purchaser for whom 
it is demonstrated to the plaintiff's sole satisfaction: (1) has the 
capability and intent of competing effectively in the production and 
sale of aggregate and stone products in Marion County; (2) has or soon 
will have the managerial, operational, and financial capability to 
compete effectively in the manufacture and sale of aggregate and stone 
products in Marion County; and (3) none of the terms of any agreement 
between the purchaser and Martin give Martin 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 Marion County.

V. Appointment of Trustee

    A. In the event that Martin has not divested the Assets to be 
Divested within the time specified in Section IV 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, I 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 IV and VIII of this Final Judgment, and 
shall have such other powers as the Court shall deem appropriate. 
Subject to Sections V(C) and VIII of this Final Judgment, the trustee 
shall have the power and authority to hire at the cost and expense of 
Martin 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 the plaintiff, and shall have such other powers as this Court shall 
deem appropriate. Martin shall not object to a sale by the trustee on 
any grounds other than the trustee's malfeasance. Any such objections 
by Martin must be conveyed in writing to the plaintiff 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 Martin, 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 Martin 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. Martin shall use its best efforts to assist the trustee in 
accomplishing the required divestiture, including best effort to effect 
all necessary regulatory approvals. 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 Martin, and Martin 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. 
Martin shall permit prospective acquirers of the assets to have access 
to personnel and to make such inspection of physical facilities and any 
and all financial, operational or other documents and other information 
as may be relevant to the divestiture required by this Final Judgment.
    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; provided, 
however, that to the extent such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the court. Such reports shall include the name,

[[Page 31459]]

address and telephone number of each person who, during the preceding 
month, made an offer to acquire, expresses 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 contact with any such person during that 
period. The trustee shall maintain full records of all efforts made to 
divest the Assets to be Divested.
    F. 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 the extent such reports contain information that the trustee 
deems confidential, such reports shall not be filed in the public 
docket of the Court. The trustee shall at the same time furnish such 
report to the parties, who shall each have the 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 of V of this Final Judgment, Martin or the 
trustee, whichever is then responsible for effecting the divestiture, 
shall notify the plaintiff of the proposed divestiture. If the trustee 
is responsible, it shall similarly notify Martin. 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 to be Divested that are the subject of 
the binding contract, together with full details of same. Within 
fifteen (15) calendar days of receipt by the plaintiff of such notice, 
the plaintiff may request from Martin, the proposed purchaser, or any 
other third party additional information concerning the proposed 
divestiture and the proposed purchaser. Martin 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 the plaintiff has been 
provided the additional information requested from Martin, the proposed 
purchaser, and any third party, whichever is later, the plaintiff shall 
provide written notice to Martin and the trustee, if there is one, 
stating whether or not it objects to the proposed divestiture. If the 
plaintiff provides written notice to Martin and the trustee that it 
does not object, then the divestiture may be consummated, subject only 
to Martin's limited right to object to the sale under Section V(B) of 
this Final Judgment. Absent written notice that the plaintiff does not 
object to the proposed purchaser or upon objection by the plaintiff, a 
divestiture proposed under Section IV shall not be consummated. Upon 
objection by the plaintiff, or by Martin 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, Martin shall deliver to the plaintiff 
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 contact with any such person during that 
period. Each such affidavit shall also include a description of the 
efforts that Martin has taken to solicit a buyer for the relevant 
assets.
    B. Within twenty (20) calendar days of the filing of this Final 
Judgment, Martin shall deliver to the plaintiff an affidavit which 
describes in detail all actions Martin has taken and all steps Martin 
has implemented on an on-going basis to preserve the Assets to be 
Divested pursuant to Section VIII of this Final Judgment and the Hold 
Separate Stipulation and Order entered by the Court. The affidavit also 
shall describe, but not be limited to, Martin'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. Martin shall deliver to the plaintiff an 
affidavit describing any changes to the efforts and actions outlined in 
Martin's earlier affidavit(s) filed pursuant to this Section within 
fifteen (15) calendar days after the change is implemented.
    C. Martin shall preserve all records of all efforts made to 
preserve and divest the Assets to be Divested.

VIII. Hold Separate Order

    Until the divestitures required by the Final Judgment have been 
accomplished, defendants shall take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by this Court. 
Defendants shall take no action that would jeopardize the divesture of 
the Assets to be Divested.

IX. Financing

    Martin is ordered and directed not to finance all or any part of 
any purchase by an acquirer made pursuant to Sections IV or V of this 
Final Judgment without prior written consent of the plaintiff.

X. Compliance Inspection

    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, and on 
reasonable notice to Martin made to its principal offices, shall be 
permitted:
    (1) Access during office hours of Martin to inspect and copy all 
books, ledgers, accounts, correspondence, memoranda, and other records 
and documents in the possession or under the control of Martin, who may 
have counsel present, relating to the matters contained in this Final 
Judgment and the Hold Separate Stipulation and Order; and
    (2) Subject to the reasonable convenience of Martin and without 
restraint or interference from it, to interview, either informally or 
on the record, its officers, employees, and agents, who may have 
counsel present, regarding any such matters.
    B. Upon the written request of the Attorney General of the 
Assistant Attorney General in charge of the

[[Page 31460]]

Antitrust Division, made to Martin's principal offices, Martin shall 
submit such written reports, under oath if requested, with respect any 
matter contained in the Final Judgment and the Hold Separate 
Stipulation and Order.
    C. No information or documents obtained by the means provided in 
Sections VII or X of this Final Judgment shall be divulged by a 
representative of the plaintiff to any person other than a duly 
authorized representative of the Executive Branch of the United States, 
except in the course of legal proceedings to which the United States 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 Martin 
to the plaintiff, Martin 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 Martin 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 the plaintiff to Martin prior to divulging such material in 
any legal proceeding (other than a grand jury proceeding) to which 
Martin is not a party.

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

    The United States, pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 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 May 27, 1997, the United States filed a civil antitrust 
complaint, which alleges that the proposed acquisition by Martin 
Marietta Materials, Inc. (``Martin'') of American Aggregates 
Corporation (``American Aggregates'') from CSR America, Inc. (``CSR 
America'') which is a subsidiary of CSR Limited (``CSR'') would violate 
Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The Complaint alleges 
that a combination of the two most significant competitors in the 
aggregate market in Marion County, Indiana would lessen competition in 
the production and sale of aggregate in Marion County. 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 Martin from acquiring control of 
American Aggregates' aggregate business, or otherwise combining such 
business with Martin's own business in the United States.
    When the Complaint was filed, the United States, also filed a 
proposed settlement that would permit Martin to complete its 
acquisition of American Aggregates' aggregate business, but require a 
certain divestiture that will preserve competition in Marion County. 
This settlement consists of a Stipulation and Order, a proposed Final 
Judgment and a Hold Separate Stipulation and Order.
    The proposed final Judgment orders Martin to divest certain Marion 
County assets--American Aggregates, Harding Street, Indianapolis, 
Indiana quarry and certain related tangible and intangible assets. 
Martin must complete the divestiture of this quarry and related assets 
within one hundred and eighty (180) calendar days after the date on 
which the proposed Final Judgment was filed (i.e., May 27, 1997) in 
accordance with the procedure specified therein.
    The Stipulation and Order, proposed Final Judgment and Hold 
Separate Stipulation and Order require Martin to ensure that, until the 
divestiture mandated by the proposed Final Judgment has been 
accomplished, the Harding Street Quarry and related assets to be 
divested will be maintained and operated as an independent, ongoing, 
economically viable and active competitor. Martin must preserve and 
maintain the quarry to be divested as a saleable and economically 
viable, ongoing concern, with competitively sensitive business 
information and decision-making divorced from that of Martin's 
aggregate business. Martin will appoint a person 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. Martin, American Aggregates and the Proposed Transaction

    Martin is engaged in the business of producing and selling 
aggregate in Marion County. In Marion County, Martin operates the 
Kentucky Avenue Quarry which produces aggregate. In 1995, Martin had 
sales of $660 million.
    Through its wholly owned subsidiary, American Aggregates, CSR is 
engaged in the business of producing and selling aggregate in Marion 
County. CSR operates two aggregate quarries in or near Marion County 
that produce aggregate which is used to manufacture asphalt concrete 
and ready-mix concrete. In 1996, American Aggregates had sales of $120 
million.
    On February 21, 1997, Martin agreed to acquire all of the 
outstanding voting securities of American Aggregates, excluding its 
Michigan operations, from CSR America which is wholly owned by CSR. The 
purchase price is approximately $234.5 million. This transaction, which 
would take place in the highly concentrated Marion County aggregate 
industry, precipitated the government's suit.

B. The Transaction's Effects in Marion County

    The Complaint alleges that, the production and sale of aggregate 
constitutes a line of commerce, or relevant product market, for 
antitrust purposes, and that Marion County constitutes a section of the 
country, or relevant geographic market. The complaint alleges that the 
effect of Martin's acquisition may be to lessen competition 
substantially in the production and sale of aggregate in Marion County.
    Aggregate is material that is used to manufacture asphalt concrete 
and ready-mix concrete. A considerable amount of the asphalt concrete 
and ready-mix concrete manufactured for use in Marion County is used on

[[Page 31461]]

highways and roads built for the Indiana Department of Transportation 
and local jurisdictions located within Marion County. No good economic 
functional substitutes exist for aggregate. Manufacturers and buyers of 
aggregate recognize aggregate as a distinct product.
    Producers of aggregate located in or near Marion County sell and 
compete with each other for sales of aggregate in Marion County. Due to 
high transportation costs and long delivery time, producers of 
aggregate not located in Marion County or in close proximity to Marion 
County do not sell a significant amount of aggregate for use within 
Marion County.
    The Complaint alleges that Martin's acquisition of American 
Aggregates would substantially lessen competition for the production 
and sale of aggregate in Marion County. Actual and potential 
competition between Martin and American Aggregates for the production 
and sale of aggregate in Marion County will be eliminated.
    Martin and American Aggregates are the only producers of aggregate 
in Marion County and are two of only three significant producers in 
close proximity to Marion County. American Aggregates and Martin sell 
the vast majority of all the aggregate used to manufacture asphalt 
concrete and ready mix concrete for road and highway construction 
projects in Marion County contracted for by the Indiana Department of 
Transportation and local jurisdictions within Marion County. The 
Indiana Department of Transportation, through its contracts for highway 
construction, is indirectly the largest purchaser of aggregate in 
Marion County.
    The acquisition of American Aggregates by Martin would create a 
dominant aggregate company in Marion County. It would reduce the number 
of significant competitors operating aggregate facilities in Marion 
County or in close proximity to Marion County from three to two, and 
significantly reduce the number of competitors located in Marion County 
supplying aggregate used to manufacture asphalt concrete and ready mix 
concrete manufactured for highways in Marion County.
    As a result of the acquisition, Martin would have significant 
control over the aggregate market in Marion County, giving it market 
power to increase the price of aggregate in Marion County. Prices for 
aggregate are likely therefore to increase. In response to such a price 
increase, purchasers could not switch to another producer of aggregate.
    New entry in Marion County is unlikely to restore the competition 
lost through Martin's removal of American Aggregates from the 
marketplace. De novo entry into the production and sale of aggregate 
requires a significant capital investment and likely would take over 
two years before any new aggregate production facility could begin 
production. State and local zoning provisions make it very difficult to 
open an aggregate production facility in or near Marion County.

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 production and sale of 
aggregate in Marion County will be substantially lessened; actual and 
potential competition between Martin and American Aggregates in the 
production and sale of aggregate in Marion County will be eliminated; 
and prices for aggregate in Marion County 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 aggregate in Marion County by placing in 
independent hands American Aggregates' Harding Street, Indianapolis, 
Indiana aggregate quarry used by American Aggregates to serve Marion 
County, thus maintaining the existing level of suppliers in the market 
place. In response to a price increase from Martin, purchasers would be 
able to turn to another producer with significant capacity to produce 
aggregate in Marion County.
    Within one hundred and eighty (180) calendar days after filing the 
proposed Final Judgment, Martin must divest American Aggregates' 
Harding Street aggregate quarry and related assets which are located in 
Marion County. The Harding Street quarry and related assets will be 
sold to a purchaser who demonstrates to the sole satisfaction of the 
United States that they will be an economically viable and effective 
competitor, capable of competing effectively in the production and sale 
of aggregate in Marion County.
    Until the ordered divestiture takes place, Martin must take all 
reasonable steps necessary to accomplish the divestiture and cooperate 
with any prospective purchaser. If Martin does not accomplish the 
ordered divestiture 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 divestiture. Martin must cooperate fully with 
the trustee.
    If a trustee is appointed, the proposed Final Judgment provides 
that Martin 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 then available 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 mandated 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, explain why the 
divestiture has not been accomplished, and make 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. Sec. 15) provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring 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. 
Sec. 16(a)), the proposed Final Judgment has no prima facie effect in 
any subsequent private lawsuit that may be brought against Martin, CSR, 
CSR America or American Aggregates.

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

[[Page 31462]]

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 commetns should be submitted to: J. Robert Kramer, Chief, 
Litigation II Section, Antitrust Division, United States Department of 
Justice, 1401 H Street, NW., Suite 3000, Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
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 production and 
sale of aggregate in Marion County 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 avoids 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. Sec. 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 (DC 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: May 23, 1997.

Respectfully submitted.
Frederick H. Parmenter,
Attorney, Department of Justice, Antitrust Division, Suite 3000, 1401 H 
Street, NW., Washington, DC 20530, (202) 307-0620.

[FR Doc. 97-14933 Filed 6-6-97; 8:45 am]
BILLING CODE 4410-11-M