201 0006 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

COMMISSIONERS: Rebecca Kelly Slaughter, Acting Chairwoman 

Noah Joshua Phillips 

Rohit Chopra 

Christine S. Wilson 

In the Matter of 

HeidelbergCement AG, 

a corporation, 

Lehigh Hanson, Inc., 

a corporation,

 Lehigh Cement Company LLC, 

a limited liability company, 

Elementia S.A.B. de C.V., 

a corporation,

 Giant Cement Holding, Inc.,

a corporation, 

and

 Keystone Cement Company, 

a limited liability company. 

Docket No. 9402 

PUBLIC VERSION 

COMPLAINT 

Pursuant to the provisions of the Federal Trade Commission Act (“FTC Act”), and by 

virtue of the authority vested in it by the FTC Act, the Federal Trade Commission 

(“Commission”), having reason to believe that Respondents HeidelbergCement AG, Lehigh 

Hanson, Inc., Lehigh Cement Company LLC (collectively, “Lehigh”), Elementia S.A.B. de C.V. 

(“Elementia”), Giant Cement Holding, Inc. (“Giant”), and Keystone Cement Company 

(“Keystone”) have executed an acquisition agreement (“Acquisition Agreement”) pursuant to 

which Lehigh will acquire substantially all the assets of Keystone (the “Acquisition”) in 

violation of Section 5 of the FTC Act, 15 U.S.C. § 45, and which if consummated would violate 

Section 7 of the Clayton Act, 15 U.S.C. § 18, and Section 5 of the FTC Act, and it appearing to 

the Commission that a proceeding by it in respect thereof would be in the public interest, hereby 

issues its complaint pursuant to Section 5(b) of the FTC Act, 15 U.S.C. § 45(b), and Section 

11(b) of the Clayton Act, 15 U.S.C. § 21(b), stating its charges as follows: 
PUBLIC 

I. 

NATURE OF THE CASE 

1. Lehigh proposes to acquire all the assets of Keystone. Today Lehigh and 

Keystone compete head-to-head to supply cement, the key input in concrete, to customers in 

eastern Pennsylvania and western New Jersey. For a significant number of customers in this 

area, Lehigh and Keystone are two of only four competitive sources of cement. 

2. Lehigh is by far the largest cement producer in the relevant market today and is 

one of the largest cement producers in No11h America. Lehigh owns and operates two cement 

plants serving customers located in eastern Pennsylvania and western New Jersey. Keystone is 

one of Lehigh's fiercest competitors for customers in this area, operating a nearby cement plant 

in Pennsylvania. Intense competit' s kept market prices down, causing 

Lehigh to complain that Keystone' · · · · ' ales. 

In ordinaiy cours 

in creaf 

gto 

higher prices for customers. 

3. Cement is an essential ingredient of concrete, one of the most important and 

widely-used building materials in the United States and worldwide across a range of constrnction 

applications. Concrete is a fundamental building material used in the constrnction of homes, 

schools, hospitals, houses of worship, residential and commercial buildings, as well as highways, 

bridges, tunnels, mass transit systems, airpo11s, sidewalks, dams, reservoirs, drinking and 

wastewater pipes, and many other pieces of critical public infrastrncture. Due to cement's 

widespread use in residential, commercial, agricultural, and governmental constrnction projects, 

increased cement prices would directly and indirectly impact the pocketbook of many consumers 

and taxpayers in the relevant market. 

4. There is no reasonable substitute for cement. Customer substitution to alternative 

products would not prevent the post-merger exercise of market power by the combined fnm. 

Nor would more distant suppliers prevent the post-merger exercise of market power by the 

combined fnm. In the cement industiy, shipping patterns are regional in nature, as the cost of 

shipping, as well as customers' requirements for frequent deliveries, make distribution over 

longer distances impractical and cost-prohibitive. Customers ove1whelmingly purchase cement 

from local sources. 

5. Most customers in the relevant mai·ket consider only four fnms, each of which 

operate plant(s) in and ai·ound the Lehigh Valley in Pennsylvania, to be viable suppliers of 

cement. These four fnms include Lehigh and Keystone, as well as Buzzi Unicem USA Inc. 

("Buzzi"), that operates a plant in Stocke11own, Pennsylvania, and Lafarge North America, Inc., 

a subsidiary of Lafai·geHolcim Ltd ~ afarge"), that operates a plant in Whitehall, Pennsylvania. 

Today, these fnms account for over ■ percent of the cement sold in the relevant market. 

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6. Cement customers in the relevant market have benefited from substantial head-tohead competition between Lehigh and Keystone. Keystone has aggressively used low prices to 

compete for business, often undercutting prices of Lehigh to win new customers or oain 

additional business. In man instances, Lehi oh res onded b 

one s o ers o cemen a ower pnces ave e eated 

attempts by Lehigh and other suppliers to chai-ge higher cement prices. In response to 

Keystone 's aggressive pricing moves, Lehigh and other cement suppliers have also reduced their 

cement prices for customers. 

8. The Acquisition would cement Lehigh's dominant position. Post-Acquisition, 

Lehigh would control overl percent of sales in the relevant market. The Acquisition would 

significantly increase concen . ·ation in an ah·eady highly concentrated market, making the 

Acquisition presumptively unlawful under the 2010 U.S. Department of Justice and Federal 

Trade Commission Horizontal Merger Guidelines (the "Merger Guidelines"). 

9. The Acquisition would eliminate competition between Lehigh and Keystone that 

has led to lower prices and better tenns for customers, bolster Lehigh's position as market leader, 

and substantially increase market concentration. As a result, it would allow Lehigh unilaterally 

to raise cement prices or decrease the quality of service provided to customers in these areas. 

10. Keystone is a pa1iicularly aggressive, low price, and disrnptive competitor. By 

removing Keystone from the market, the Acquisition would also make the relevant market more 

susceptible to anticompetitive coordination among the remaining cement suppliers. 

11. Neither new entry nor expansion by other market participants is likely to be 

timely or sufficient to prevent the Acquisition's anticompetitive effects. No new plants or 

te1minals have been constrncted in the relevant market in over 30 years. There are significant 

baniers to entry in the market for the production and sale of cement, including substantial sunk 

costs, environmental and regulato1y requirements, economies of scale, and industry expertise. 

12. Respondents will not be able to prove verifiable, cognizable efficiencies would 

result from the Acquisition that would be sufficient to rebut the strong presumption ofha1m and 

other evidence of the Acquisition's likely significant anticompetitive effects. 

13. As a result, Lehigh's proposed acquisition of Keystone likely would substantially 

lessen competition for cement in eastern Pennsylvania and western New Jersey in violation of 

Section 5 of the FTC Act, 15 U .S.C. § 45 and Section 7 of the Clayton Act, 15 U.S.C. § 18. 

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II. 

JURISDICTION 

14. Respondents, and each of their relevant operating entities and subsidiaries are, 

and at all relevant times have been, engaged in commerce or in activities affecting "commerce" 

as defined in Section 4 of the FTC Act, 15 U.S.C. § 44, and Section 1 of the Clayton Act, 15 

U.S.C. § 12. 

15. The Acquisition is subject to Section 7 of the Clayton Act, 15 U.S.C. § 18. 

III. 

RESPONDENTS 

16. Respondent HeidelbergCement AG ("Heidelberg") is a Geiman corporation 

headqurutered in Heidelberg, Ge1many. Operating in more than 50 countries, Heidelberg is one 

of the largest building materials companies in the world. Its core business is the production and 

distribution of cement and aggregates. fu 2020, Heidelberg sold over 122 million metric tons of 

cement worldwide and generated total revenues of over $20 billion. 

17. Respondent Lehigh Hanson, fuc. ("Lehigh Hanson") is a Delaware corporation 

headqurutered in Irving, Texas. Lehigh Hanson is a wholly-owned subsidiary of Heidelberg and 

is a leading supplier of constrnction materials in No1th America. It operates 19 cement plants in 

North America (including jointly-owned facilities) and sold over 15.5 million metric tons of 

cement in 2020. 

18. Respondent Lehigh Cement Company LLC ("Lehigh Cement") is a Delaware 

limited liability company headqua1tered in frving, Texas. Lehigh Cement is an indirectly 

wholly-owned subsidiary of Heidelberg. Lehigh Cement is identified as the "Buyer" in the 

Acquisition Agreement. Lehigh Cement is a leading cement supplier in the United States, 

serving customers through 13 wholly- and jointly-owned cement plants and a large network of 

distribution te1minals. Lehigh Cement supplies cement to customers located in eastern 

Pennsylvania and western New Jersey principally from its plants located in or near Nazru·eth and 

Evansville, Pennsylvania. 

19. Respondent Elementia is a Mexican corporation headqurutered in Mexico City, 

Mexico. Elementia is a leading international building materials company with over 6,000 

employees, operations in nine colllltries, and three business divisions: cement, metal products, 

and building systems. Elementia indirectly holds a 55 percent ownership interest in Giant, which 

is the parent of Keystone. Elemeutia is the ultimate pru·ent entity of Giant and Keystone and, as 

such, is the legal entity that filed a Premerger Notification and Repo1t Fonn with the FTC and 

the Deprutment of Justice for the Acquisition-pursuant to the Hait-Scott-Rodino Antitrnst 

Improvement Act of 1976, 15 U.S.C. § 18a-and responded to the Request for Additional 

fufo1mation and Documentaiy Material from the Commission. 

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Respondent Giant is a Delaware corporation. It is a holding company that owns 

Keystone, as well as two other companies that operate cement plants in the United States outside 

of the relevant geographic market. Giant is a party to the Acquisition Agreement. 

Respondent Keystone is a Pennsylvania limited liability company headquartered 

in Bath, Pennsylvania. A wholly-owned subsidiary of Giant, Keystone owns and operates a 

cement plant and related assets located in East Allen Township (just south of Bath) in 

Northampton County, Pennsylvania. Keystone has produced cement at this location since 1928. 

In 2009, Keystone completed a three-year, $230 million modernization and expansion project, 

making the plant the most modern cement manufacturing facility in the region. 

IV. 

THE ACQUISITION 

On September 26, 2019, Heidelberg’s indirectly wholly-owned subsidiary Lehigh 

Cement entered into an Asset Purchase Agreement with Elementia’s subsidiaries Giant and 

Keystone, pursuant to which Lehigh Cement proposes to acquire the assets comprising 

Keystone’s cement manufacturing and distribution business for $151 million, subject to 

adjustment. 

V. 

THE RELEVANT PRODUCT MARKET 

The relevant product market in which to assess the effects of the Acquisition is 

the production and sale of gray portland cement (“cement”). Cement is an essential ingredient 

for making concrete, one of the most important building materials in the United States across a 

range of construction applications. Most cement is purchased to make ready-mix concrete. 

Delivered to the jobsite in concrete mixer trucks with the familiar revolving drums, ready-mix 

concrete is used in most residential, commercial, and public construction projects, including 

buildings, bridges, and highways. Other uses for cement include manufacturing pre-cast 

concrete products, making mortar for masonry applications, and soil stabilization. 

The cement manufacturing process is capital-intensive. The elements necessary 

for making cement include calcium and silica, as well as small amounts of alumina and iron. 

The main raw material, limestone, is usually extracted from a quarry located near the cement 

manufacturing plant. The limestone is transported to the cement plant where it is crushed, 

combined with other raw materials, and then ground together. The ground material is then 

introduced into huge rotary furnaces called “kilns” where it is processed at extremely high 

temperatures to create a lava-like substance called clinker. The red-hot clinker nodules are then 

cooled and ground with a small amount of gypsum (calcium sulphate) into a fine powder to 

create cement. 

Cement customers often specify a certain type of cement based on construction 

requirements or conditions. Cement manufacturers make different types of cement with slightly 

different properties formulated to meet defined standards. These cements are classified as Types 

I through V, according to standards prescribed by the American Society for Testing and 

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Materials. Some cements meet multiple standards. Types I, II (moderate sulfate-resistant), and 

I/II are general-purpose cements suitable for making concrete for most buildings, pavements, 

bridges, and other structures, and are the most widely consumed types of cement in the relevant 

market. Type III cement is used where high early strength is desired. Type III cement is 

identical in chemical composition to the former types but is ground to a finer consistency, with 

the result that it achieves full compressive strength at a faster pace when mixed with water. 

There is little to no demand for Type IV (low heat of hydration) cement or Type V (high sulfate 

resistance) cement in the relevant market. Another common type of cement is masonry cement, 

which is a mixture of portland cement, a plasticizer (which makes the mortar more fluid and 

hence more workable), and other ingredients. Masonry cement is used to make mortar and 

masonry block. 

Most cement customers purchase cement in bulk form, usually in trailer loads of 

about 25 tons. Producers also distribute small amounts of cement in bags containing about 70-94 

pounds of cement for resale to building trades professionals and consumers. 

There is no cost-effective substitute for cement. Other cementitious materials, 

such as fly ash or ground, granulated blast furnace slag, are not close substitutes for cement and 

have a negligible impact on the price of cement. Customer substitution to other products would 

be insufficient to defeat to a small but significant, non-transitory price increase (“SSNIP”) 

imposed by a hypothetical monopolist supplier of cement in the region. 

Industry participants recognize that cement is a distinct product from other 

building materials. Cement suppliers do not consider the threat of substitution to any other 

product when pursuing price increases and consistently calculate market shares only in relation 

to sales of cement. 

VI. 

THE RELEVANT GEOGRAPHIC MARKET 

The relevant geographic market in which to analyze the competitive effects of the 

Acquisition is no broader than the eastern Pennsylvania and western New Jersey area. A list of 

the counties that compose the relevant geographic market is included in Appendix A. 

A hypothetical monopolist that was the only present and future seller of cement in 

the relevant market could profitably impose a SSNIP on customers located in eastern 

Pennsylvania and western New Jersey. Competition from more distant suppliers located outside 

the relevant market would not defeat the price increase because acquiring cement from those 

more distant plants requires more expensive and less reliable transportation. 

Several factors serve to limit the distance over which cement can be economically 

shipped. Cement is a heavy and bulky but relatively low-cost product. As a result, the cost of 

transporting cement is large in proportion to the cost of cement itself. Transport costs increase 

proportionally as the distance from the customer to the supplier increases, leading customers to 

prefer local sources. Other factors that lead customers to purchase cement from local sources are 

convenience and security of supply. Many customers require frequent shipments of cement 

(even multiple daily shipments) to maintain their production levels of concrete. Traveling farther 

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to obtain cement could reduce the number of daily trips a customer could make using their own 

semi-trucks and pneumatic bulk trailers (or force the customer to obtain additional tractor trailers 

in order to haul a similar volume of cement). Traveling greater distances could also expose a 

customer to a greater possibility of supply disruptions due to weather or traffic congestion. 

Cement prices are not posted, but instead are determined through bilateral 

negotiation between suppliers and customers. As a result, actual transaction prices often vary 

significantly from customer to customer. In most cases, suppliers and customers negotiate 

annually to determine the price and terms by which each particular customer will purchase 

cement for the upcoming year. Usually the quoted cement price is subject to change at any time 

and is not guaranteed by written contract. When negotiating the price of cement, suppliers are 

aware of the logistical cost advantage or disadvantage they hold relative to other cement 

suppliers for sale to a specific customer’s location(s). Cement suppliers consider their relative 

transportation cost advantage or disadvantage when quoting prices to individual customers. In 

addition, cement suppliers often monitor information regarding their competitor’s costs, sales 

volumes, and capacity utilization. Using all of this information, cement suppliers are able to 

identify customers that face limited competitive options and are able to target those customers 

with higher prices. 

Because cement suppliers can price discriminate based on a customer’s location 

and competitive alternatives, it is analytically appropriate to define relevant geographic markets 

based on the locations of targeted customers. Although relevant geographic markets could be 

defined as narrowly as individual customers, it is appropriate and accurate to define a relevant 

market consisting of customers located in eastern Pennsylvania and western New Jersey because 

customers in this region of the country face similar competitive conditions. 

This relevant geographic market conforms to the commercial realities of the 

cement industry and is consistent with how Lehigh, Keystone, and other cement suppliers 

conduct their business and assess the markets in which they compete in the ordinary course of 

business. Industry participants analyze competition in regional markets and view competition in 

the relevant market as distinct from other markets in which they operate, including, for example, 

markets in western Pennsylvania, Maryland, and the New York City metropolitan region. 

The four firms that operate cement plants located in or near Pennsylvania’s 

Lehigh Valley are the only economically feasible options for many customers in the relevant 

geographic market. Due to the additional cost, time, and inconvenience required to transport 

cement from more distant suppliers, customer substitution to suppliers located outside of the 

market would be insufficient to defeat a small but significant non-transitory price increase 

imposed by a hypothetical monopolist supplier of cement in the region. 

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VII. 

MARKET STRUCTURE AND THE ACQUISITION'S PRESUMPTIVE ILLEGALITY 

36. The relevant market is already highly concentrated. In recent years, the relevant 

market has experienced significant consolidation, including Heidelberg's 2016 acquisition of 

Italcementi S.p.A., through which Lehigh acquired its cement plant in Nazareth, Pennsylvania. 

3 7. Lehigh and Keystone are now two of only four suppliers that have significant 

sales in the relevant market. In addition to Lehigh and Keystone, Lafarge and Buzzi produce and 

distribute cement at plants located in Pem1sylvania's Lehigh Valley. These four suppliers 

account for over ■ percent of cement sales in the relevant market. In addition to these four 

finns, Riverside ~ nstmction Materials, a subsidiary of the Silvi Grou , im 01is cement at its 

te1minal in Bristol, Penns lvania, which it distributes 

38. The Acquisition would substantially increase concentration levels in this already 

highly concentrated market. Lehigh is by far the leadin~ ement supplier in the relevant market. 

If the Acquisition closes, Lehigh will control more than ■ percent of cement sales in eastern 

Pennsylvania and western New Jersey. 

39. The Merger Guidelines and comis use the Herfindahl-Hirschman Index ("HHI") 

to measure market concentration. HHis are calculated by totaling the squares of the market 

shares of each film in the relevant market, both before and after the transaction. A relevant 

market is "highly concentrated" under the Merger Guidelines if it has an HHI level of 2,500 or 

more. Under the Merger Guidelines, transactions likely to create or enhance market power are 

presumptively unlawful. A transaction is presumed likely to create or enhance market power, 

and is presumptively illegal, if the post-transaction HHI exceeds 2,500 and the transaction 

increases the HHI by more than 200 points. 

40. If consummated, the Acquisition would result in a post-Acquisition HHI of over 

3,500 and would increase the HHI by more than 1,000-levels that far exceed the necessary 

thresholds for presumptive illegality. Accordingly, the Acquisition is presumptively unlawful 

under the Merger Guidelines and relevant case law. 

VIII. 

ANTICOMPETITIVE EFFECTS 

A. 

The Acquisition Would Eliminate Head to Head Competition between Lehigh and 

Keystone 

41. Lehigh and Keystone are close competitors for many cement customers in eastern 

ennsylvania and western New Jersey and are two of just four significant suppliers in the 

elevant market. The Acquisition would significantly reduce competition for cement customers 

nd allow the combined film to raise prices or reduce output in the relevant market. 

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42. The significant direct competition between Lehigh and Keystone has benefited 

cement customers in the relevant market. Many customers in the mai-ket request price quotes 

from both Lehigh and Keystone when negotiating terms for pm-chasing cement. Keystone has 

often demonstrated a willingness to offer low prices to win or attempt to win business from 

Lehigh. Keystone's aggressive pricing has caused Lehigh to lower its cement prices in the 

relevant market and compete on price more vigorously. 

44. Lehigh recognizes that the completion of the Acquisition will eliminate the 

· · · vantage of Ke stone's lower rices. 

45. One of the motivations driving the Acquisition is the perceived defensive value to 

be attained by removing the competitive threat osed b Ke stone. Lehi executives concluded 

that, absent the Acquisition, Keystone would at 

.. expense, and that the Acquisition wou preven 

B. 

to Curtail I Output Following the Acquisition 

C. 

The Acquisition Would Increase the Likelihood of Anticompetitive Coordination 

4 7. The Acquisition would increase the likelihood and efficacy of anticompetitive 

coordination among cement suppliers in the relevant market. Cement suppliers, including the 

same companies that own facilities in the relevant market, have previously expressly colluded in 

other geographic markets with similar characteristics. For example, Heidelberg was among six 

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finns fined by the Bundeskru.1ellamt in 2003 for engaging in illegal cru.1el activity in Getman 

cement markets. Following the Acquisition, all of the three remaining significant pa1ticipants (or 

their pru.·ent companies) in the relevant mru.·ket-Lehigh, Lafarge, and Buzzi-have been found 

guilty of illegally coordinating to increase the price of cement in other geographic mru.-kets within 

the last two decades. 

48. The relevant mru.·ket has characteristics that make it vulnerable to coordination. 

Those chru.·acteristics include a highly-concentrnted market with limited competitors; a 

homogeneous product; significant transparency as to the prices, costs, capacities, and strategic 

initiatives of rival fnms; sales that ru.·e small, frequent, and usually not made pursuant to longte1m contracts; low price elasticity of demand; and evidence of past interdependent behavior by 

market paiticipants. 

49. Competitors commonly track each other's customers, production capacities, costs, 

sales volumes, and prices. Cement suppliers ru.·e often able to obtain information relating to their 

rivals' prices to individual customers and general price increase announcements that are typically 

made by each supplier on an annual basis. Post-Acquisition, access to such info1mation will 

enable Lehigh and the remaining cement suppliers in the relevant mru.·ket to detect and 

effectively punish deviations from coordinated schemes or tacit agreements to increase prices, 

reduce output, or allocate customers. 

50. Because cement has no close substitutes Lehigh and the remaining significant 

suppliers of cement in the relevant market would likely be able to raise cement prices without 

feat· of losing sales to suppliers of other products. 

51. In recent years, Keystone has emerged as a paiticulru.-Iy aggressive competitor in 

the relevant market. Keystone, , has 

sought to grow its sales and y wmmng usmess rom 

other suppliers' customers oy o 

52. Keystone's aggressive pricing has prevented Lehigh and other suppliers from 

increasing the price of cement in the relevant market. For example, a Lehigh sales presentation 

from 2017 described how 

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ano er exam e, m n , a e sa es resen a 10n re 01 e , 

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53. The Acquisition would significantly increase concentration in this ah-eady highlyconcentrated mai·ket and would reduce the number of significant competitors from four to three. 

By reducing the number of competitors, the Acquisition would reduce obstacles to coordination 

and make it easier for Lehigh and the other two remaining significant cement suppliers to 
PUBLIC 

monitor and retaliate against deviations from coordinated schemes or tacit agreements to increase 

cement prices, reduce output, or allocate customers. 

54. Heidelberg's own internal anal 

the Ac uisition concluded that the 

55. By reducing the number of competitors and eliminating Keystone, a fum that 

plays a disruptive role in the market to the benefit of customers, the Acquisition would likely 

strengthen existing tendencies among remaining films to coordinate and enhance the prospects 

for successful coordination in the future. 

IX. 

LACK OF COUNTERVAILING FACTORS 

A. 

Entry Barriers 

56. Respondents cannot demonstrate that new entry or expansion by existing fums 

would be timely, likely, or sufficient to offset the anticompetitive effects of the Acquisition and 

rebut the presumption that the Acquisition is illegal. To the contrary, the cement industry is 

characterized by substantial baiTiers to enfly. 

57. Construction of a new cement facility would require significant upfront sunk-cost 

investments and take several years to accomplish. Finding a suitable location, if one is available,

and obtaining necessaiy governmental pennits and approvals is difficult and time-consuming and

this process alone can take numerous yeai·s. Even if a fum could find a suitable location and 

obtain all necessary governmental approvals, the constrnction of a cement production facility 

would take considerable resources and time. For example, Elementia estimated that it would 

cost approximately and require a minimum of- to construct a new cement 

plant in eastern Pennsy vama with a capacity similar to Keys one s ath plant. 

58. Enny by constrncting a marine tenninal is also costly and time-consuming. 

Seeming a suitable site to accoll11llodate ships of sufficient size is difficult. Finding an available 

location to constrnct a cement impo1t te1minal, obtaining all requisite regulato1y approvals and 

e1mits, and constrnctin the facilit would likel take more than t\vo eai·s. For exam le, when 

59. New enfl·y by means of a trnck or rail te1minal is unlikely and would be 

insufficient to prevent the likely anticompetitive effects of the Acquisition. Due to the additional 

costs of transpoliing cement to the te1minal ( as well as te1minal operating costs), a new enfl·ant 

seeking to compete in the relevant market using a fl11ck or rail te1minal would be 1mlikely to be 

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cost competitive, because it would be competing directly against maTket paiiicipants that locally 

operate lower cost cement plants. 

60. Expansion by existing cement suppliers would not be timely, likely, or sufficient 

to prevent the competitive haim from the Acquisition. 

B. 

Efficiencies 

61. Respondents cannot demonstrate merger-specific cognizable efficiencies 

sufficient to rebut the strong presumption and evidence of the Acquisition's likely significant 

anticompetitive effects. 

X. 

VIOLATION 

COUNT I - ILLEGAL AGREEMENT 

62. The allegations of Pai·agraphs 1 through 61 above are incorporated by reference as 

though fully set forth. 

63. The Acquisition Agreement constitutes an unfair method of competition in 

violation of Section 5 of the FTC Act, as amended, 15 U.S.C. § 45. 

COUNT II - ILLEGAL ACQUISITION 

64. The allegations of Pai·agraphs I through 61 above ai·e incorporated by reference 

as though fully set fo1ih. 

65. The Acquisition, if consummated, may substantially lessen competition in the 

relevant market in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and is 

an unfair method of competition in violation of Section 5 of the FTC Act, as amended, 15 

U.S.C. § 45. 

NOTICE 

Notice is hereby given to the Respondents that the second day of November 2021 , at 10 

.m. EST, is hereby fixed as the time, and the Federal Trade Commission offices at 600 

ennsylvania Avenue, N.W., Room 532, Washington, D.C. 20580, as the place, when and where 

n evidentiary hearing will be had before an Administrative Law Judge of the Federal Trade 

ollllllission, on the chai·ges set fo1ih in this complaint, at which time and place you will have 

he right under the Federal Trade Commission Act and the Clayton Act to appear and show cause 

hy an order should not be entered requiring you to cease and desist from the violations of law 

harged in the complaint. 

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You ru·e notified that this administrative proceeding shall be conducted as though the 

Commission, in an ancillary proceeding, has also filed a complaint in a United States District 

Com1, seeking relief pursuant to Section 13(b) of the Federal Trade Commission Act, 15 U.S.C. 

53(b), as provided by Commission Rule 3. l l(b)(4), 16 CFR 3.l l(b)(4). You are also notified 

that the opportunity is afforded you to file with the Commission an answer to this complaint on 

or before the fomieenth (14th) day after se1vice of it upon you. Au answer in which the 

allegations of the complaint ru·e contested shall contain a concise statement of the facts 

constituting each grolllld of defense; and specific admission, denial, or explanation of each fact 

alleged in the complaint or, if you are without knowledge thereof, a statement to that effect. 

Allegations of the complaint not thus answered shall be deemed to have been admitted. If you 

elect not to contest the allegations of fact set fo1ih in the complaint, the answer shall consist of a 

statement that you admit all of the material facts to be true. Such an answer shall constitute a 

waiver of heru·ings as to the facts alleged in the complaint and, together with the complaint, will 

provide a record basis on which the Commission shall issue a final decision containing 

appropriate findings and conclusions and a final order disposing of the proceeding. In such 

answer, you may, however, reserve the right to subtuit proposed findings and conclusions llllder 

Rule 3.46 of the CoIIllllission's Rules of Practice for Adjudicative Proceedings. 

Failure to file an answer within the time above provided shall be deemed to constitute a 

waiver of your right to apperu· and to contest the allegations of the complaint and shall authorize 

the Commission, without fmiher notice to you, to find the facts to be as alleged in the complaint 

and to enter a final decision containing appropriate findings and conclusions, and a final order 

disposing of the proceeding. 

The Administrative Law Judge shall hold a prehearing scheduling conference not later 

than ten (10) days after the Respondents file their answers. Unless othe1wise directed by the 

Administrative Law Judge, the scheduling conference and fm1her proceedings will take place at 

the Federal Trade CoIIllllission, 600 Pennsylvania Avenue, N.W., Room 532, Washington, D.C. 

20580. Rule 3.2l(a) requires a meeting of the parties' cmmsel as eru-ly as practicable before the 

pre-hearing scheduling conference (but in any event no later than five (5) days after the 

Respondents file their answers). Rule 3.3l(b) obligates collllsel for each pa11y, within five (5) 

days ofreceiving the Respondents' answers, to make certain initial disclosures without awaiting 

a discovery request. 

NOTICE OF CONTEMPLATED RELIEF 

Should the Commission conclude from the record developed in any adjudicative 

proceedings in this matter that the Acquisition challenged in this proceeding violates Section 5 of

the Federal Trade CoIIllllission Act, as amended, and/or Section 7 of the Clayton Act, as 

amended, the CoIIllllission may order such relief against Respondents as is suppo11ed by the 

record and is uecessaiy and appropriate, including, but not lituited to: 

1. If the Acquisition is consuIIllllated, divestiture or reconstitution of all associated 

and necessruy assets, in a manner that restores two or more distinct and separate, 

viable and independent businesses in the relevant market, with the ability to offer 

such products and se1vices as Lehigh and Keystone were offering and planning to 

offer prior to the Acquisition. 

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PUBLIC 

2. A prohibition against any transaction between Respondents that combines their 

businesses in the relevant market, except as may be approved by the Commission. 

3. A requirement that, for a period oftime, Respondents provide prior notice to the 

Commission of acquisitions, mergers, consolidations, or any other combinations 

of their businesses in the relevant market with any other company operating in the 

relevant markets 

4. A requirement to file periodic compliance repo1is with the Commission. 

5. Any other relief appropriate to conect or remedy the anticompetitive effects of the 

transaction or to restore Keystone as a viable, independent competitor in the 

relevant markets. 

IN WITNESS WHEREOF, the Federal Trade Commission has caused this complaint to 

be signed by its Secretruy and its official seal to be hereto affixed, at Washington, D.C., this 

twentieth day of May 2021. 

By the Commission. 

/')_ 

~ 

"'\ --?,_...__4. ---- 1':r 

Secreta1y 

14 
PUBLIC 

Appendix A: 

List of Counties in Relevant Geographic Market eastern Pennsylvania and western New Jersey: 

Eastern Pennsylvania 

Berks 

Bradford 

Bucks 

Carbon 

Centre 

Chester 

Clinton 

Columbia 

Cumberland 

Dauphin 

Delaware 

Jlmiata 

Lackawanna 

Lancaster 

Lebanon 

Lehigh 

Luzerne 

Lycoming 

Monroe 

Montgomery 

Montour 

Northampton 

Northumberland 

Peny 

Philadelphia 

Pike 

Schuylkill 

Snyder 

Sullivan 

Susquehanna 

Tioga 

Union 

Wayne 

Wyoming 

York 

Western New Jersey 

Atlantic 

Burlington 

Camden 

Cape May 

Cumberland 

Gloucester 

Hlmterdon 

Monis 

Salem 

Somerset 

Sussex 

Wanen 

15