United States v. Martin Marietta Materials, Inc. et al.; Proposed Final Judgment and Competitive Impact Statement

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