PUBLIC VERSION 

Docket No. C-4579 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

 

 ) 

In the Matter of ) 

 ) 

 ) 

HEIDELBERGCEMENT AG, ) Docket No. C-4579 

a corporation; ) 

 ) File No. 151 0200 

 and ) 

 ) 

ITALCEMENTI S.p.A, ) 

a corporation. ) 

 ) 

 ) 

APPLICATION FOR APPROVAL OF DIVESTITURE OF MARTINSBURG

Pursuant to Section 2.41(f) of the Federal Trade Commission’s (the “Commission”) 

Rules of Practice and Procedure, 16 C.F.R. § 2.41(f), and Section II of the Decision & Order 

issued by the Commission on August 15, 2016 (the “D&O”), HeidelbergCement AG 

(“Heidelberg”) and Italcementi S.p.A. (“Italcementi”) hereby petition the Commission to 

approve the divestiture of the Martinsburg Cement Business1

 to Argos USA LLC, a subsidiary of 

Cementos Argos S.A. (“Argos”), upon the terms and subject to the conditions of the agreement 

dated August 17, 2016 (the “Divestiture Agreement”) provided with this Application as 

Confidential Appendix A. 

 1

 All capitalized terms not defined herein have meanings given to them in the Decision & Order issued by 

the Commission on August 15, 2016. 
PUBLIC VERSION 

Docket No. C-4579 

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I. Introduction

On June 10, 2016, Respondents and the Commission executed an Agreement Containing 

Consent Orders (“Consent Agreement”) that included a proposed Decision & Order and an Order 

to Maintain Assets (“OMA”) to settle the Commission’s charges relating to Heidelberg’s 

acquisition of Italcementi. On June 16, 2016, the Commission accepted the Consent Agreement 

for public comment, and shortly thereafter Heidelberg completed the acquisition of 

approximately 45% of Italcementi voting securities.2 After a public comment period, the 

Commission subsequently approved the final D&O on August 15, 2016. 

Paragraph II.B of the D&O requires Heidelberg and Italcementi to divest the Martinsburg 

Cement Business. Pursuant to this obligation, Heidelberg and Italcementi have sought diligently 

and quickly to identify a buyer that would satisfy the purposes of the D&O. On August 17, 

2016, Heidelberg entered into the Divestiture Agreements to sell the Martinsburg Cement 

Business to Argos for a total base purchase price of $660,000,000. 

Heidelberg and Italcementi desire to complete the proposed divestiture to Argos as soon 

as possible following Commission approval. Prompt consummation will further the purposes of 

the D&O and is in the interests of the Commission, the public, Heidelberg and Italcementi, and 

Argos. A prompt closing will allow Argos to move forward with its business plans for the 

competitive operation of the Martinsburg Cement Business. It will also allow Heidelberg and 

Italcementi to fulfill their obligations under the D&O. Heidelberg and Italcementi accordingly 

request that the Commission promptly commence the period of public comment pursuant to 

 2

 Heidelberg plans to acquire 100% of the voting shares of Italcementi in a two-step transaction: first, by 

acquiring a 45% shareholding in Italcementi from Italmobiliare S.p.A., and second, by acquiring the remaining 

shares through a mandatory public cash tender offer. Heidelberg expects the entire Italcementi transaction will be 

completed in the second half of 2016. 
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Docket No. C-4579 

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Section 2.41(f)(2), 16 C.F.R. § 2.41(f)(2), and grant this Application by approving the divestiture 

of the Martinsburg Cement Business to Argos as soon as practicable after the period for public 

comment closes. 

II. The Proposed Divestiture

On August 17, 2016, subject to the Commission’s approval, Heidelberg, through its U.S. 

subsidiary, Lehigh Hanson, Inc., entered into a binding and definitive Divestiture Agreement to 

sell the Martinsburg Cement Business to Argos for $660 million, subject to inventory and other 

adjustments. The Divestiture Agreement includes an Asset Purchase Agreement for the 

Martinsburg Cement Business as well as certain ancillary agreements regarding, inter alia, 

supply and transition services. 

Paragraph I.LL of the D&O describes the assets that Heidelberg and Italcementi are 

required to divest. The scope of the Asset Purchase Agreement is consistent with this obligation. 

All of Heidelberg’s rights, title, and interest in and to all assets, tangible and intangible, relating 

to the Martinsburg Cement Business will be acquired by Argos, as required by the D&O. 

Additionally, consistent with Paragraph II.C of the D&O, Heidelberg will provide certain 

transition services to Argos to facilitate the divestiture and Argos’ integration of the assets. The 

scope of these transition services is consistent with both the D&O and the services required by 

Argos during the first twenty-four months of Argos’ ownership and operation of the Martinsburg 

Cement Business, and can be terminated by Argos at any time upon commercially reasonable 

notice. 

III. Argos Is Well-Qualified to Be a Viable Competitor

Argos is a qualified and viable purchaser of the Martinsburg Cement Business. As an 

independent, leading producer of construction materials, Argos has the industry experience, 
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Docket No. C-4579 

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operational capability, and financial wherewithal to ensure the Martinsburg Cement Business 

will remain a strong, competitive business. Accordingly, the proposed divestiture will 

accomplish the purposes of the D&O by ensuring the continuation of the Martinsburg Cement 

Business as ongoing, viable facilities engaged in the cement business. 

A. Argos Has Proven Expertise Operating Cement Businesses

Argos is a global construction materials company. Argos was founded in 1934 as Argos 

Cement Company, and since then has grown to become a leading cement, concrete, and 

aggregates producer in North, Central, and South America with over 9,200 employees and 

annual revenues exceeding $2.9 billion. 

Argos has a proven track record in cement. Argos today operates 9 integrated cement 

plants in Colombia, 3 in the United States, and 1 in Honduras; 9 clinker mills located in the 

United States, Haiti, Panama, the Dominican Republic, Honduras, French Guiana, and Suriname; 

and 24 ports and terminals located throughout North, Central, and South America. Argos’ total 

installed capacity exceeds 21.5 million tons of cement per year. 

Argos began producing cement in the United Sates in 2011, after its acquisition of the 

Calera, Alabama and Harleyville, South Carolina cement plants from Lafarge. Since then, Argos 

has grown to become a leading cement producer in the Southeast and a leading ready-mix 

concrete producer throughout the country, with total U.S. sales exceeding $1.3 billion in 2015. 

Based on Argos’ history of success in the cement industry, Heidelberg and Italcementi 

fully believe that Argos has the expertise to operate the Martinsburg Cement Business in a 

similarly successful and competitive manner. 
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Docket No. C-4579 

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B. Argos Does Not Compete With the Martinsburg Cement Business 

Argos’ acquisition of the Martinsburg Cement Business raises no competitive concerns. 

While Argos operates cement plants in the Southern and Southeast United States today, it 

operates no cement assets in the mid-Atlantic region today, including any of the markets in 

which the Martinsburg Cement Business operates. As a result, the addition of the Martinsburg 

Cement Business is a natural extension of Argos’ existing footprint. 

C. Argos Has A Successful History of Integrating Assets

Argos has a long track record of successfully integrating assets into its operations. For 

example, in just the last five years, Argos has acquired cement and ready-mix plants located in 

the Southern U.S. from Lafarge for $760 million (2011), and cement and ready-mix assets 

located in Florida from Vulcan Materials Company for $720 million (2014), as well as numerous 

acquisitions in Central and South America. 

Moreover, Argos has a history of improving and expanding its integrated assets. In 2014, 

Argos initiated a $56 million expansion of the Harleyville, South Carolina cement plant, 

including adding nearly 500,000 tons in grinding capacity and enabling production of new types 

of cementitious products. Heidelberg and Italcementi believe this history of successful 

acquisitions and subsequent development will enable Argos to equally succeed with the 

Martinsburg Cement Business. 

IV. Conclusion

There is every reason to believe that Argos will be a viable and competitive owner of the 

Martinsburg Cement Business. Argos is an experienced and well-established global construction 

material producer. Moreover, Argos’ acquisition of these assets does not raise competitive 
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Docket No. C-4579 

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issues; to the contrary, the Martinsburg Cement Business is highly complementary to Argos’ 

existing U.S. footprint. 

The proposed divestiture of the Martinsburg Cement Business to Argos will accomplish 

the purposes of the D&O and the Commission’s goals. Accordingly, Heidelberg and Italcementi 

seek expeditious Commission approval of the proposed divestiture to Argos as soon as possible 

after expiration of the public comment period. 

 
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Docket No. C-4579 

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Request for Confidential Treatment

This application, including exhibits, contains confidential and competitively sensitive 

information relating to the divestiture of the Martinsburg Cement Business. Pursuant to Section 

4.2(d)(4) of the Commission’s Rules of Practice and Procedure, 16 C.F.R. § 4.2(d)(4), 

Heidelberg and Italcementi are submitting two versions of this Application. The confidential 

version contains nonpublic or commercially or competitively sensitive information. The public 

version redacts confidential information. Pursuant to Sections 6(f) and 21(c) of the Federal 

Trade Commission Act, 15 U.S.C. §§ 46(f) and 57b-2(c), and Sections 2.41(f)(4), 4.9(c) and 

4.10(a)(2) of the Commission’s Rules of Practice, 16 C.F.R. §§ 2.41(f)(4), 4.9(c) and 4.10(a)(2), 

Heidelberg and Italcementi request that all nonpublic or commercially or competitively sensitive 

information contained in the Application be treated by the Commission as strictly confidential 

and not be made available to the public. The disclosure of such information may prejudice 

Heidelberg, Italcementi, and Argos. 

PUBLIC VERSION 

Docket No. C-4579 

CONFIDENTIAL APPENDIX A

Asset Purchase Agreement among Lehigh Hanson, Inc., Essroc Cement Corp., Argos US, LLC, 

and Cementos Argos S.A., dated August 17, 2016, and related agreements 
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Docket No. C-4579 

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