PUBLIC VERSION

coal, fucl, natural gas and electricity, are provided by third parties to the Calera Site and, under
the Site Services Agreement, will be provided by LBM to Peak on a cost pass-through basis,
The pricing and other terms that govern the provision of these and other services by LBM to
Peak will allow Peak to continue opcrating the Lime Plant as a successful stand-alone business.

‘The Site Services Agreement also provides that LBM will, at its expense,
construct new buiiding facilities {e.g., contro] room, administrative building and laboratory) for
Peak in order to separate the essential operations of the Lime Piant from the other facilities at the
Calera Site.

Cc Lime Rock Supply Apreement

Pursuant to paragraph IRR of the Decision and Order, LBM and Peak have
entered into a Lime Rock Supply Agreement by which LBM will supply lime rock to Peak. The
terms of the Lime Rock Supply Agreement ensure that Peak will have access to a reliable, long-
term, low-cost supply of lime rock. The price structure of the Lime Rock Supply Agreement will
enable Peak to establish itself as a strong, cest-competitive supplier of lime in the Southeast

region. Confidential information about the terms and conditions of the Lime Rock Supply

Agreement is provided in Confidential Appendix C.

Ili. The Proposed Acquirer

Peak is a limited liability company organized under the laws of Massachuselts,
engaged in the acquisition and management of various companics, generally in the
minerals/chemicals and aircraft services businesses. Over the past twelve years, the principals of
Peak have acquired and managed companies with combined sales of over $1 billion, including

the third Jargest salt company in the world, the second largest boron company, the second largest


PUBLIC VERSION

CONFIDENTIAL APPENDIX C

[REDACTED]


PUBLIC VERSION

During the eighteen months since Peak acquired the phosphorus pentasulfide business, Peak has
made significant improvements in thc operating practices and performance of the business. In
particular, the business has achieved over 30% growth in sales volume, was awarded an

outstanding supply rating from the two largest customers and has been re-certified ISO 9002.

IV. Conclusion

The proposed divestiture of the Lime Assets to Pcak will accomplish the purposes
of the Consent Order and remedy any alleged lessening of competition in the preduction and sale
of lime in the Southeast region that may result from Lafarge’s acquisition of Blue Circle. Peak
has the experience and (he resources necessary to ensure thal the Lime Assets will prosper as a
separate, competitive supplier of time in the United States, particularly in the Southeast region.
Furthermore, because Peak currently does not produce or sell lime in the United States, the sale
of the Lime Assets to Peak will facilitate entry of a strong, new competitor in the hinc industry.
Accordingly, the Parties respectfully request that the Commission approve the proposed
divestimre and acquirer.

Respectfully submitted,

George.

Mark W. Nelo

Dipali B. Mehta

Cleary, Gottlieb, Steen & Hamilton
2000 Pennsylvania Ave., N.W.
Washington, D.C. 20006

Counsel for Lafarge

Pay


PUBLIC VERSION

sulfate of potash company and one of the five natural soda ash producers. The headquarters
address of Peak is:

Peak Investments, L.L.C.

15700 Coilege Boulevard, Suite 101

Lenexa, Kansas 66219
The officers and directors of Peak are Michael R. Boyce, Chairman and Chief Executive Officer,
Scott Randolph, Chief Financial Officer; William J. Sichko, Jr., Chief Administrative Officer;
and Billy Whalen, Chief Information Officer. Information on their experience and backgrounds
is provided in Appendix D hereto.

Having successfully operated a significant lime production facility in Australia
that produced almost five times the amount of lime currently produced by the Lime Plant, Peak
has demonstrated experience in managing the operations of a large lime plant. Peak’s Australian
lime facility consisted of four rotary lime kilns that employed production methods similar to the
Lime Plant (although the Lime Plant operates only one rotary kiln). Moreover, the markets
served by Peak’s Australian operation were similar to those that the Lime Plant targets.

Peak also has extensive experience in successfully acquiring and managing
businesses that involve shared site arrangements and long-term supply agreements. These
businesses include a business located on a site shared with ICI in Runcorm, United Kingdom; a
business located on a site shared with Eni in Larderello, Italy; and, most notably, a business
located on a site shared with Astaris {a joint venture betwecn FMC and Solutia) in Lawrence,
Kansas, where Peak operates a phosphorus pentasulfide plant acquired as the result of a
Commission-ordered divestiture. In that Aprit 2000 transaction, the Commission approved Peak
as the purchaser of FMC’s phosphorus pentasul fide plant, and approved the long-term

agreements under which Astaris continues to provide site services and raw materials to Peak.


PUBLIC VERSION

CONFIDENTIAL APPENDIX B

(REDACTED)


PUBLIC VERSION

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

LAFARGE S.A,
2 corporation,

Docket No. € - 4014
File No. 001 - 0112

BLUE CIRCLE INDUSTRIES PLC,
a corporation,

BLUE CIRCLE NORTR AMERICA INC,,
2 corporation, and

BLUE CIRCLE INC.,
a corporation.

Ne ee al at Net el Ne ee et et Ne et See ee

PETITION OF LAFARGE S.A.
FOR APPROVAL OF PROPOSED DIVESTITURE

Pursuant to Section 2.41(f) of the Federal Trade Commission (“Commission”)
Rules of Practice and Procedure, 16 C.F.R. § 2.41 (2001), and paragraph IV.C of the Decision
and Order in the above-captioned matter (the “Decision and Order”), Lafarge S.A. (“Lafarge”),
Blue Circle Industries ple, Blue Circle North America Inc. and Blue Circle Inc. (collectively
“Blue Circle” and together with Lafarge, the “Parties”) hereby petition the Commission to
approve the divestiture of Blue Circle’s Lime Assets to Peak Investments L.L.C. (‘Peak’)!

At the outset, it bears noting that Lafarge does not operate a lime business in the
United States. Lafarge’s only interest in any U.S. line business is through the ownership of a

minority shareholding in Carmeuse North America.

' All capitalized terms not defined in this application have the meanings given to tem in the Commission's
Decision and Ordet.


PUBLIC VERSION

has a BS m Applied Science from the Umted States Naval Academy, and an MBA from The
George Washington University. He has been a CMA since 1991.

3. Wiliam J. Sichko, Chief Administrative Officer

Prot to joining Peak Investments in 1999, Mr. Sichko was Senior Vice President - Human
Resources for Harris Chemical Group with responsibility for 3,500 employees in the United
States. Canada, the United Kingdom, Germany, France, Italy and Australia. He also acted as the
company’s Labor and Employment Counsel. Additionally, Mr. Sichko was President of Searles
Valley Residences and Searies Valley Water Company, wholly-owned subsidiaries of Hatris
Chemical Group.

Following IMC Global's acquisition of Harris Chemical Group in 1998, Mr. Sichko was named
Senior Vice President of IMC Global, reporting directly to the Chairman and CEO.

Before joimny Harris Chemical Group, Mr. Sichko was with General Chemical where he held
the position of Director - Industrial Relations from 1987 through 1991.

Earlier in his career, Mr. Sichko was with United States Stec! Corporation where he held various *
positions in human resources,

Mr. Sichko is a graduate of the United States Naval Academy. He hoids a JD from Duquesne
University School of Law. He has also attended the University of Pittsburgh's Graduate School

of Business.

4. Billy G. Whalen, Chief Information Officer

Prior to joining Peak Investments, Mr. Whalen was Director of Information Services for MAC
Equipment and Chief Information Officer for SOS Staffing.

Prior to 1999, Mr. Whalen was Director of Information Systems for Harris Chemical Group,
responsible for hardware and software operations and development throughout the United States,
Canada, the United Kingdom, Germany, France, Italy, and Australia, Harris Chemical Group
operated with a total annual turnover of $1.2 billion.

Before joining Harris Chemicai Group, Mr. Whalen held various management and technical
positions with Phillips Petrofeum for 17 years. During that time, he worked in Phillips*
Chemicals and Plastics divisions around the world, including in the United States, Southeast
Asia, Europe and Latin America. Mr. Whalen attended Eastern Kentucky University and the
University of Kentucky and received a BS in Computer Science from Fugazzi College. In
addition, Mr. Whalcn represented Phillips Petroleum in an advanced computer science program
at the MIT’s Sioan School of Management.


PUBLIC VERSION

APPENDIX D

Biographies of Peak Priucipals

1. Michael R. Boyce, Chairman and Chief Executive Officer

Prior to Apri! 1998, Mr. Boyce was President and COO of Harris Chemical Group as well as
COO of ils operating units, North American Salt Company, North American Chemical
Company, Great Salt Lake Minerals Company and Harris Chemical Europe Lid. He worked in
that capacity from January 1990 through March 1998. Mr. Boyce was also CEO of Penrice Soda
Products Pty. Ltd, in Australia. Before joining Harts Chemical Group, he was with General
Chemical, where he spent two years as Vice President and General Manager of its Industrial
Chemicals Division.

Prior to joining General Chemical, Mr. Boyce was President of Catalyst Resources, Inc., 2
subsidiary of Phillips Petroleum Company, which manufactures polypropylene and polyethylene .
polymerization catalysts.

From 1983 through 1986, Mr. Boyce was Vice President and General Manager of Sylvachem

Corporation, a wholly awned subsidiary of SCM Corporation, a company active in specialty
chemicals. Earlier in his career, he was with Union Carbide, where he held a variety of positions

in business management, sales and marketing, and manufacturing.

A graduate of West Virginia State University with a BS in Chemistry, Mr. Boyce also attended
the University of Houston’s Graduate School of Business, and is a graduate of Harvard
University’s Advanccd Management Program.

2. Scott H. Randolph, Chief Financial Officer

Prior to joining Peak Investments in 2000, Mr. Randolph was Vice President and General
Manager of the Worldwide Boron Business of FMC Global and Managing Director of Societa
Chimica Larderelle, the Italian subsidiary of IMC Global. The company operated with total
worldwide sales of $130 million.

From 1995 to 1997, Mr. Randolph was Vice President of Strategic Planning and Development
for Harris Chemical Group, reporting to the CEO. From 1993 through £995, he served as Vice
President of Finance and Administration for Harris Chemical Group Europe and a Director of

Salt Union, SCL and Harris Chemical Europe.

Prior to that, Mr. Randolph was Site Controller for North American Chemical Company and the
Trona Railway (Trona, California), subsidiaries of the Harris Chemical Group. Before moving
to Trona, Mr. Randolph held positions in finance and marketing analysis with General Chemical
Corporation in Wyoming and New Jersey. A former nuclear-trained naval officer, Mr. Randolph


PUBLIC VERSION

CONFIDENTIAL APPENDIX A

[REDACTED]


PUBLIC VERSION

property; {v) contract nights with third parties; (vi) government approvals and permits; (vii)
rights under express or implied warranties from suppliers; (viii) books and records; (ix} plant
facilities, machinery, equipment, furniture, fixtures, tools, vehicles, and transportation and
storage facilities; {x) product inventory, raw materials, and supplies and parts, including work-in-
process and finished product; (xi) customer and vendor lists, catalogs, sales promotion literature
and advertising materials; and (xit) certain accounts receivable and certain accounts payable.
Further, under the Asset Purchase Agreement, Peak will also be granted numerous easements ©
burdening the portion of the Calera Site not being conveyed to Peak (which easements will
peumit Peak to continue to access and operate the Lime Assets in the manner in which they are
currently accessed and operated). Pursuant to paragraph IV.B of the Decision and Order, Peak
will also assume the Lime Off-Take Agreement, which was reviewed by Commission staff prior
to the signing of the Consent Agreement.

Tn addition, pursuant to paragraph 1V.F of the Decision and Order, Peak will hire
experienced management personnel, other salaried employees and union employees to operate
the Lime Assets. An explanation of thc employce-related provisions in the Assct Purchase

Agreement is provided in Confidential Appendix B hereto.

B. Site Services Agreement
Pursuant to paragraph I.SS of the Decision and Order, LBM and Peak have

entered into a Site Services Agreement by which LBM will provide Peak certain services at the
Calera Site (and pursuant to which Peak will provide certain services to LBM at the Calera Site).
Among the services to be provided by LBM are supply of industrial water, coal, fuel, electricity,
natural gas, tclephone lines, computer networking lines, bagging and loading services, sewage

and industrial waste water removal services, and rail services. Several of these services, such as


PUBLIC VERSION

the provision of certain services by LBM and Peak to each other at the site where the Lime Plant
Agreement and the Site Services Agreement are referred to collectively as the “Transaction
Documents” and are attached hereto as Confidential Appendix A.)

Lafarge requests that all of the Transaction Documents and other information
provided in Confidential Appendices A through C be treated by the Commission as strictly
confidential and not be made available to the public. Confidential Appendices A through C
contain commercially and competitively sensitive information relating to the divestiture of the
Lime Assets. Disclosure of the information contained in these Confidential Appendices to the
public will prejudice Lafarge and Peak, and negatively affect Lafarge’s ability to comply with
the Consent Order. Lafarge requests that the Commission inform it immediately if the
Commission will not treat the confidential version of this application and the accompanying
documents and information of Lafarge and Peak as confidential so that Lafarge may seek
appropriate rcliof.*

As explained below, the terms of the Transaction Documents comply with and

satisfy the purposes of the Decision and Order.

A Asset Purchase Agrcement

Pursuant to the Asset Purchase Agreement, Peak wil! acquire all assets necessary
to operate Blue Circle’s time business, including, but not limited to; (i) the Lime Plant located at

8039 Highway 25, Calera, Alabama; (ii) real property; {iii} personal property; (iv) intellectual

> LBM also operates 4 cement plant and quarry at the Calera Site, neither of which are required to be
divested under the Decision and Order.

‘ For the convenience of mamtaming the public record, the Parties are submitting this application in two
versions ~ one that includes confidential and proprietary information (the “Confidential Version”) and
another that is the same as the Confidential Version, but with Confidential Appenctices A through C
redacted (the “Public Version”).


PUBLIC VERSION

L Consent Agreement and Complaint

On May 30, 2001, Lafarge, Bluc Circle and the Commission entered into an
Agreement Containing Consent Orders that includes a Decision and Order, and an Order to Hold
Separate and Maintain Assets (collectively, the “Consent Aercemnent”), The Consent
Agreement, together with the Commission’s Complaint, was placed iu the public record on
June 18, 2001, and subsequently made final by the Commission. On July 11, 200], Lafarge
complcted Hs acquisition of Bme Circie. Currently, Lafarge Building Materials Inc. (“LBM”)
(the suecessor to Blue Circle Inc.) owns the Lime Assets and operates them in accordance with
the Order to Hold Separate and Maintain Assets.

Count III of the Commission’s Complaint alleges that the acquisition by Lafarge
of Blue Circle will substantially mcrease concentration in the manufacture, marketing and sale of
lime in the Southeast region of the United States and, as a result, may substantially lessen
competition in the market for lime in the Southeast region.” Accordingly, paragraph IV.C of the
Decision and Order requires the Parties to divest Blue Circle’s Lime Assets no later than 180
days from the date upon which Lafarge consummates its acquisition of Blue Circle.

This application describes the principal terms of the agreements by which the
Parties will divest the Lime Assets and explains how the divestiture of the Lime Assets to Peak

Salisfies the purposes of the Decision and Onlez.

WI. The Transaction Documents
On September 27, 2001, LBM and Peak entered into {3) an Asset Purchase

Agreement providing for the sale of the Lime Assets to Peak, (ii) a Lime Rock Supply

Agreement providing for the sale of lime rock to Peak, and {iti} a Site Services Agreement for

The Commnission’s Complaint defines ihe Southeast region as Alabama, Georgia and Florida.
2