United States v. Oldcastle Northeast et al.; Proposed Final Judgment and Competitive Impact Statement

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.

----------------------------------------------------------------------

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