Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Notices 2187 

1Handbook for Electronic Filing Procedures: 

https://www.usitc.gov/documents/handbook_on_

filing_procedures.pdf. 

2All contract personnel will sign appropriate 

nondisclosure agreements. 

3Electronic Document Information System 

(EDIS): https://edis.usitc.gov. 

prominent place on the cover page and/ 

or the first page. (See Handbook for 

Electonic Filing Procedures, Electronic 

Filing Procedures 1). Persons with 

questions regarding filing should 

contact the Secretary (202–205–2000). 

Any person desiring to submit a 

document to the Commission in 

confidence must request confidential 

treatment. All such requests should be 

directed to the Secretary to the 

Commission and must include a full 

statement of the reasons why the 

Commission should grant such 

treatment. See 19 CFR 201.6. Documents 

for which confidential treatment by the 

Commission is properly sought will be 

treated accordingly. All such requests 

should be directed to the Secretary to 

the Commission and must include a full 

statement of the reasons why the 

Commission should grant such 

treatment. See 19 CFR 201.6. Documents 

for which confidential treatment by the 

Commission is properly sought will be 

treated accordingly. All information, 

including confidential business 

information and documents for which 

confidential treatment is properly 

sought, submitted to the Commission for 

purposes of this Investigation may be 

disclosed to and used: (i) By the 

Commission, its employees and Offices, 

and contract personnel (a) for 

developing or maintaining the records 

of this or a related proceeding, or (b) in 

internal investigations, audits, reviews, 

and evaluations relating to the 

programs, personnel, and operations of 

the Commission including under 5 

U.S.C. Appendix 3; or (ii) by U.S. 

government employees and contract 

personnel,2 solely for cybersecurity 

purposes. All nonconfidential written 

submissions will be available for public 

inspection at the Office of the Secretary 

and on EDIS.3

This action is taken under the 

authority of section 337 of the Tariff Act 

of 1930, as amended (19 U.S.C. 1337), 

and of §§ 201.10 and 210.8(c) of the 

Commission’s Rules of Practice and 

Procedure (19 CFR 201.10, 210.8(c)). 

By order of the Commission. 

Issued: January 10, 2018. 

Katherine M. Hiner, 

Supervisory Attorney. 

[FR Doc. 2018–00605 Filed 1–12–18; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Antitrust Division 

United States v. Vulcan Materials 

Company, SPO Partners II, L.P., and 

Aggregates USA, LLC, Proposed Final 

Judgment and Competitive Impact 

Statement 

Notice is hereby given pursuant to the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16(b)–(h), that a proposed 

Final Judgment, Stipulation, and 

Competitive Impact Statement have 

been filed with the United States 

District Court for the District of 

Columbia in United States of America v. 

Vulcan Materials Company, SPO 

Partners, II, L.P., and Aggregates USA, 

LLC, Civil Action No. 1:17–cv–02761. 

On December 22, 2017, the United 

States and the State of Tennessee filed 

a Complaint alleging that Vulcan 

Material Company’s proposed 

acquisition of Aggregates USA, LLC 

would violate Section 7 of the Clayton 

Act, 15 U.S.C. 18. The proposed Final 

Judgment, filed at the same time as the 

Complaint, requires Defendants to 

divest all of Aggregates USA’s active 

quarries, plants, and yards in the 

Knoxville, Tennessee, Tri-Cities, 

Tennessee, and Abingdon, Virginia 

areas. These divestitures include 

seventeen Aggregates USA facilities. 

Copies of the Complaint, proposed 

Final Judgment, and Competitive Impact 

Statement are available for inspection 

on the Antitrust Division’s website at 

http://www.justice.gov/atr and at the 

Office of the Clerk of the United States 

District Court for the District of 

Columbia. Copies of these materials may 

be obtained from the Antitrust Division 

upon request and payment of the 

copying fee set by Department of Justice 

regulations. 

Public comment is invited within 60 

days of the date of this notice. Such 

comments, including the name of the 

submitter, and responses thereto, will be 

posted on the Antitrust Division’s 

website, filed with the Court, and, under 

certain circumstances, published in the 

Federal Register. Comments should be 

directed to Maribeth Petrizzi, Chief, 

Defense, Industrials, and Aerospace 

Section, Antitrust Division, Department 

of Justice, 450 Fifth Street NW, Suite 

8700, Washington, DC 20530 

(telephone: (202) 307–0924). 

Patricia A. Brink, 

Director of Civil Enforcement. 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

United States of America, United States 

Department of Justice, Antitrust Division, 450 

Fifth Street NW, Suite 8700, Washington, DC 

20530 and State of Tennessee, Attorney 

General’s Office, 500 Charlotte Avenue, 

Nashville, Tennessee 37202 Plaintiffs, v. 

Vulcan Materials Company, 1200 Urban 

Center Drive, Birmingham, Alabama 35242, 

SPO Partners II, L.P., 591 Redwood Highway, 

Suite 3215, Mill Valley, California 94941, and 

Aggregates USA, LLC, 3300 Cahaba Road, 

Suite 320, Birmingham, Alabama 35223 

Defendants. 

Civil Action No: 1:17–cv–02761 

Judge: Amit Mehta 

COMPLAINT 

Plaintiffs, the United States of 

America (‘‘United States’’), acting under 

the direction of the Attorney General of 

the United States, and the State of 

Tennessee, acting by and through the 

Attorney General of Tennessee, bring 

this civil antitrust action against 

Defendants to enjoin Vulcan Materials 

Company’s (‘‘Vulcan’’) proposed 

acquisition of Aggregates USA, LLC 

(‘‘Aggregates USA’’) from SPO Partners 

II, L.P. (‘‘SPO Partners’’). Plaintiffs 

complain and allege as follows: 

I. INTRODUCTION 

1. Vulcan’s proposed acquisition of 

Aggregate USA’s quarries would secure 

Vulcan’s control over the supply of 

coarse aggregate necessary to complete 

various construction projects in parts of 

east Tennessee and southwest Virginia. 

Coarse aggregate is one of the primary 

materials used to build, pave, and repair 

roads and is used widely in other types 

of construction. Coarse aggregate is an 

essential input in asphalt concrete, 

which is used to pave roads, and ready 

mix concrete, which is used to create 

bridges and is a structural element of 

many buildings. Coarse aggregate is also 

needed for other phases of construction, 

such as the base layer of rock that 

provides a foundation for paved roads 

and large buildings. Vulcan currently 

supplies coarse aggregate in east 

Tennessee and southwest Virginia and 

already holds a significant market share 

in each region. 

2. Vulcan and Aggregates USA are the 

primary suppliers of coarse aggregate for 

projects in parts of east Tennessee and 

southwest Virginia, together supplying 

nearly all of the coarse aggregate 

purchased directly by the Tennessee 

and Virginia Departments of 

Transportation (‘‘DOT’’) or purchased 

by contractors for use in Tennessee and 

Virginia DOT projects. Vulcan and 

Aggregates USA are also the two leading 

suppliers of coarse aggregate used in 

private construction projects in parts of 

east Tennessee and southwest Virginia. 

The proposed acquisition would 

eliminate the head-to-head competition 

between Vulcan and Aggregates USA. 


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As a result, prices for coarse aggregate 

would likely increase significantly if the 

acquisition is consummated. 

3. The states of Tennessee and 

Virginia spend hundreds of millions of 

dollars on new construction and road 

maintenance projects each year. 

Without competing suppliers for the 

necessary inputs for road construction 

and other building projects, individuals, 

the states of Tennessee and Virginia, as 

well as federal and state taxpayers, 

would pay the price for Vulcan’s control 

over these important markets. In light of 

these market conditions, Vulcan’s 

acquisition of Aggregates USA’s quarries 

would cause significant anticompetitive 

effects in the markets for coarse 

aggregate in parts of east Tennessee and 

southwest Virginia. Therefore, the 

proposed acquisition violates Section 7 

of the Clayton Act, 15 U.S.C. 18, and 

should be enjoined. 

II. THE PARTIES AND THE PROPOSED 

TRANSACTION 

4. Defendant Vulcan is incorporated 

in New Jersey with its headquarters in 

Birmingham, Alabama. Vulcan produces 

and sells coarse aggregate for the 

construction industry in 20 states as 

well as the District of Columbia. Vulcan 

also produces coarse aggregate in 

Mexico, which it distributes and sells at 

numerous terminals and yards along the 

Gulf Coast of the United States. In 2016, 

Vulcan reported net sales of $3.5 billion. 

5. Defendant SPO Partners is a 

Delaware limited partnership 

headquartered in Mill Valley, California. 

With more than $7 billion in assets 

under management, SPO Partners 

invests in a wide range of industries, 

including industrial materials, media, 

telecommunications, energy, power and 

real estate. SPO Partners acquired 

Aggregates USA in 2010. 

6. Defendant Aggregates USA is 

headquartered in Birmingham, 

Alabama. Aggregates USA produces and 

sells coarse aggregate in four states: 

Florida, Georgia, Tennessee and 

Virginia. In 2016, Aggregates USA 

reported net sales of approximately 

$124 million. 

7. On May 25, 2017, Vulcan 

announced a definitive agreement with 

SPO Partners to acquire Aggregates USA 

for approximately $900 million. The 

primary assets acquired are Aggregates 

USA’s 13 active quarries, including nine 

quarries in east Tennessee and one 

quarry in southwest Virginia, the 

equipment used to operate those 

quarries, and several inactive quarries in 

east Tennessee. 

III. JURISDICTION AND VENUE 

8. The United States brings this action 

pursuant to Section 15 of the Clayton 

Act, 15 U.S.C. 4 and 25, as amended, to 

prevent and restrain Defendants from 

violating Section 7 of the Clayton Act, 

15 U.S.C. 18. 

9. The State of Tennessee brings this 

action under Section 16 of the Clayton 

Act, 15 U.S.C. 26, to prevent and 

restrain Vulcan and Aggregates USA 

from violating Section 7 of the Clayton 

Act, as amended, 15 U.S.C. 18. The 

State of Tennessee, by and through the 

Attorney General of Tennessee, brings 

this action as parens patriae on behalf 

of the citizens, general welfare, and the 

general economy of the State of 

Tennessee. 

10. Defendants produce and sell 

coarse aggregate in the flow of interstate 

commerce. Defendants’ activity in the 

production and sale of coarse aggregate 

substantially affects interstate 

commerce. The Court has subject matter 

jurisdiction over this action pursuant to 

Section 15 of the Clayton Act, 15 U.S.C. 

25, and 28 U.S.C. 1331, 1337(a), and 

1345. 

11. Defendants have consented to 

venue and personal jurisdiction in this 

judicial district. Venue is therefore 

proper in this district under Section 12 

of the Clayton Act, 15 U.S.C. 22, and 28 

U.S.C. 1391(c). 

IV. TRADE AND COMMERCE 

A. Coarse Aggregate is an Essential 

Input for Many Construction Projects 

12. Coarse aggregate is a category of 

material used for construction projects 

and in various industrial processes. 

Produced in quarries, mines, and gravel 

pits, coarse aggregate is predominantly 

limestone, granite, or trap rock. 

Different types and sizes of rock are 

needed to meet different specifications 

for use in asphalt concrete, ready mix 

concrete, industrial processes, and other 

products. Asphalt concrete consists of 

approximately 95 percent coarse 

aggregate, and ready mix concrete is 

made of up of approximately 75 percent 

coarse aggregate. Coarse aggregate thus 

is an integral input for road and other 

construction projects. 

13. For each construction project, a 

customer establishes specifications that 

must be met for each application for 

which coarse aggregate is used. For 

example, state DOTs, including the 

Tennessee and Virginia DOTs, set 

specifications for coarse aggregate used 

to produce asphalt concrete, ready mix 

concrete, and road base for state DOT 

projects. State DOTs specify 

characteristics such as hardness and 

durability, size, polish value, and a 

variety of other characteristics. The 

specifications are intended to ensure the 

longevity and safety of the projects that 

use coarse aggregate. 

14. For Tennessee and Virginia DOT 

projects, to ensure that the stone for an 

application meets proper specifications, 

the respective DOTs qualify quarries 

according to the end uses of the coarse 

aggregate. In addition, the Tennessee 

and Virginia DOTs test the coarse 

aggregate at various points: At the 

quarry before it is shipped; when the 

coarse aggregate is sent to the purchaser 

to produce an end product such as 

asphalt concrete; and after the end 

product has been produced. Many 

cities, counties, commercial entities, 

and individuals in Tennessee and 

Virginia use their respective state DOTqualified coarse aggregate specifications 

when building roads, bridges, and other 

construction projects in order to 

optimize longevity. 

B. Transportation is a Significant 

Component of the Cost of Coarse 

Aggregate 

15. Coarse aggregate is priced by the 

ton and is a relatively inexpensive 

product, with prices typically ranging 

from approximately five to twenty 

dollars per ton. A variety of approaches 

are used to price coarse aggregate. For 

small volumes, coarse aggregate often is 

sold according to a posted price. For 

large volumes, customers typically 

either negotiate prices for a particular 

job or seek bids from multiple coarse 

aggregate suppliers. 

16. In areas where coarse aggregate is 

locally available, it is transported from 

quarries to customers by truck. Truck 

transportation is expensive and, for 

construction projects located more than 

a few miles from a quarry, 

transportation costs can become a 

significant portion of the total cost of 

coarse aggregate. 

C. Relevant Markets 

1. State DOT-Qualified Coarse 

Aggregate is a Relevant Product Market 

17. Within the broad category of 

coarse aggregate, different types and 

sizes of stone are used for different 

purposes. For instance, coarse aggregate 

qualified for use as road base may not 

be the same size and type of rock as 

coarse aggregate qualified for use in 

asphalt concrete. Accordingly, they are 

not interchangeable for one another and 

demand for each is separate. Thus, each 

type and size of coarse aggregate likely 

is a separate line of commerce and a 

relevant product market within the 

meaning of Section 7 of the Clayton Act. 

18. State DOT-qualified coarse 

aggregate is coarse aggregate qualified 


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by the state DOT for use in road 

construction in that particular state. 

State DOT-qualified coarse aggregate 

meets particular standards for size, 

physical composition, functional 

characteristics, end uses, and 

availability. A customer whose job 

specifies state DOT-qualified coarse 

aggregate cannot substitute non-DOTqualified coarse aggregate or other 

materials, including coarse aggregate 

qualified by a different state DOT. 

19. Although numerous narrower 

product markets exist, the competitive 

dynamic for most types of state DOTqualified coarse aggregate is nearly 

identical, as a quarry can typically 

produce all, or nearly all, types of state 

DOT-qualified coarse aggregate for a 

particular state. Therefore, most types of 

state DOT-qualified coarse aggregate for 

a particular state may be combined for 

analytical convenience into a single 

relevant product market for the purpose 

of evaluating the competitive impact of 

the acquisition. 

20. A small but significant increase in 

the price of state DOT-qualified coarse 

aggregate would not cause a sufficient 

number of customers to substitute to 

another type of coarse aggregate or 

another material so as to make such a 

price increase unprofitable. 

Accordingly, the production and sale of 

Tennessee DOT-qualified coarse 

aggregate and Virginia DOT-qualified 

coarse aggregate (hereinafter ‘‘DOTqualified coarse aggregate’’) are distinct 

lines of commerce and relevant product 

markets within the meaning of Section 

7 of the Clayton Act. 

2. The Relevant Geographic Markets 

are Local 

21. Coarse aggregate is a relatively 

low-cost product that is bulky and 

heavy. As a result, the cost of 

transporting coarse aggregate is high as 

compared to the value of the product. 

22. When customers seek price quotes 

or bids, the distance from the quarry to 

the project site or plant location will 

have a considerable impact on the 

selection of a supplier, due to the high 

cost of transporting coarse aggregate 

relative to the low value of the product. 

Suppliers know the importance of 

transportation cost to a potential 

customer’s selection of a coarse 

aggregate supplier; they know the 

locations of their competitors, and they 

often will factor the cost of 

transportation from other suppliers into 

the price or bid that they submit. 

23. The primary factor that 

determines the area a supplier can serve 

is the location of competing quarries. 

When quoting prices or submitting bids, 

coarse aggregate suppliers will account 

for the location of the project site or 

plant, the cost of transporting coarse 

aggregate to the project site or plant, and 

the locations of the competitors that 

might bid on a job. Therefore, 

depending on the location of the project 

site or plant, suppliers are able to adjust 

their bids to account for the distance 

other competitors are from a job. 

a. The Knoxville area is a Relevant 

Geographic Market 

24. Vulcan owns and operates eleven 

quarries that serve Knox, Loudon, 

Jefferson, and Grainger Counties in 

Tennessee as well as portions of 

surrounding counties (hereinafter 

referred to as the ‘‘Knoxville area’’). 

Customers with plants or jobs in the 

Knoxville area may, depending on the 

location of their plant or job sites, also 

economically procure Tennessee DOTqualified coarse aggregate from four 

quarries operated by Aggregates USA. 

Other more distant quarries cannot 

compete successfully on a regular basis 

for customers with plants or jobs in the 

Knoxville area because they are too far 

away and transportation costs are too 

great. 

25. A small but significant postacquisition increase in the price of 

Tennessee DOT-qualified coarse 

aggregate to customers with plants or 

job sites in the Knoxville area would not 

cause those customers to procure coarse 

aggregate from suppliers other than 

Vulcan and Aggregates USA in 

sufficient quantities so as to make such 

a price increase unprofitable. 

Accordingly, the Knoxville area is a 

relevant geographic market for the 

production and sale of Tennessee DOTqualified coarse aggregate within the 

meaning of Section 7 of the Clayton Act. 

b. The Tri-Cities area is a Relevant 

Geographic Market 

26. Vulcan owns and operates four 

quarries that serve Washington, 

Sullivan, Carter and Unicoi Counties in 

Tennessee as well as portions of 

surrounding counties (hereinafter 

referred to as the ‘‘Tri-Cities area’’). 

Customers with plants or jobs in the TriCities area may, depending on the 

location of their plant or job site, also 

economically procure Tennessee DOTqualified coarse aggregate from five 

quarries operated by Aggregates USA. 

Other more distant quarries cannot 

compete successfully on a regular basis 

for customers with plants or jobs in the 

Tri-Cities area because they are too far 

away and transportation costs are too 

great. 

27. A small but significant postacquisition increase in the price of 

Tennessee DOT-qualified coarse 

aggregate to customers with plants or 

job sites in the Tri-Cities area would not 

cause those customers to procure coarse 

aggregate from suppliers other than 

Vulcan and Aggregates USA in 

sufficient quantities so as to make such 

a price increase unprofitable. 

Accordingly, the Tri-Cities area is a 

relevant geographic market for the 

production and sale of Tennessee DOTqualified coarse aggregate within the 

meaning of Section 7 of the Clayton Act. 

c. The Abingdon area is a Relevant 

Geographic Market 

28. Vulcan owns and operates one 

quarry that serves parts of Washington 

County in Virginia and portions of 

surrounding counties (hereinafter 

referred to as the ‘‘Abingdon area’’). 

Customers with plants or jobs in the 

Abingdon area may, depending on the 

location of their plant or job sites, also 

economically procure Virginia DOTqualified coarse aggregate from a quarry 

operated by Aggregates USA. Other 

more distant quarries cannot compete 

successfully on a regular basis for 

customers with plants or jobs in the 

Abingdon area because they are too far 

away and transportation costs are too 

great. 

29. A small but significant postacquisition increase in the price of 

Virginia DOT-qualified coarse aggregate 

to customers with plants or job sites in 

the Abingdon area would not cause 

those customers to procure coarse 

aggregate from suppliers other than 

Vulcan and Aggregates USA in 

sufficient quantities so as to make such 

a price increase unprofitable. 

Accordingly, the Abingdon area is a 

relevant geographic market for the 

production and sale of Virginia DOTqualified coarse aggregate within the 

meaning of Section 7 of the Clayton Act. 

D. Vulcan’s Acquisition of Aggregates 

USA is Anticompetitive 

30. Vigorous competition between 

Vulcan and Aggregates USA on price 

and customer service in the production 

and sale of DOT-qualified coarse 

aggregate has benefitted customers in 

the Knoxville, Tri-Cities, and Abingdon 

areas (the ‘‘Relevant Areas’’), all of 

which face similar competitive 

conditions. 

31. The competitors that could 

constrain Vulcan and Aggregates USA 

from raising prices on DOT-qualified 

coarse aggregate in the Relevant Areas 

are limited to those who are qualified by 

the Tennessee and Virginia DOTs to 

supply coarse aggregate and can 

economically transport the coarse 

aggregate into these areas. 


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32. Since the Relevant Areas are each 

exclusively served today by Vulcan and 

Aggregates USA, the proposed 

acquisition will reduce from two to one 

the number of suppliers of DOTqualified coarse aggregate in each of 

those areas. Further, the proposed 

acquisition will substantially increase 

the likelihood that Vulcan will 

unilaterally increase the price of DOTqualified coarse aggregate to a 

significant number of customers in the 

Relevant Areas. 

33. For many customers, a combined 

Vulcan and Aggregates USA will have 

the ability to increase prices for DOTqualified coarse aggregate. The 

combined firm could also decrease 

service for these same customers by 

limiting availability or delivery options. 

DOT-qualified coarse aggregate 

producers know the distance from their 

own quarries or yards and their 

competitors’ quarries to a customer’s job 

site. Generally, because of 

transportation costs, the farther a 

supplier’s closest competitor is from a 

job site, the higher the price and margin 

that supplier can expect for that project. 

Post-acquisition, in instances where 

Vulcan and Aggregates USA quarries or 

yards are the closest locations to a 

customer’s project, the combined firm, 

using the knowledge of its competitors’ 

locations, will be able to charge such 

customers higher prices or decrease the 

level of customer service. 

34. The proposed acquisition will 

substantially lessen competition in the 

market for the production and sale of 

DOT-qualified coarse aggregate in the 

Relevant Areas, which is likely to lead 

to higher prices and reduced customer 

service for consumers of such products, 

in violation of Section 7 of the Clayton 

Act. 

E. Difficulty of Entry 

35. Timely, likely, and sufficient entry 

in the production and sale of DOTqualified coarse aggregate in the 

Relevant Areas is unlikely, given the 

substantial time and cost required to 

open a quarry. 

36. Quarries are particularly difficult 

to locate and permit. First, securing the 

proper site for a quarry is difficult and 

time-consuming. Finding land with the 

correct rock composition requires 

extensive investigation and testing of 

candidate sites, as well as the 

negotiation of necessary land transfers, 

leases, and/or easements. Further, the 

location of a quarry close to likely job 

sites is extremely important due to the 

high cost of transporting coarse 

aggregate. Once a location is chosen, 

obtaining the necessary permits is 

difficult and time-consuming. Attempts 

to open a new quarry often face fierce 

public opposition, which can prevent a 

quarry from opening or make opening it 

much more time-consuming and costly. 

Finally, even after a site is acquired and 

permitted, the owner must spend 

significant time and resources to 

prepare the land and purchase and 

install the necessary equipment. 

37. Because of the cost and difficulty 

of establishing a quarry, entry will not 

be timely, likely or sufficient to mitigate 

the anticompetitive effects of Vulcan’s 

proposed acquisition of Aggregates 

USA. 

V. VIOLATION ALLEGED 

38. Vulcan’s proposed acquisition of 

Aggregates USA likely will substantially 

lessen competition in the production 

and sale of DOT-qualified coarse 

aggregate in the Relevant Areas, in 

violation of Section 7 of the Clayton 

Act, 15 U.S.C. 18. 

39. Unless enjoined, the proposed 

acquisition likely will have the 

following anticompetitive effects, 

among others: 

(a) actual and potential competition 

between Vulcan and Aggregates USA in 

the market for the production and sale 

of DOT-qualified coarse aggregate in the 

Relevant Areas will be eliminated; and 

(b) prices for DOT-qualified coarse 

aggregate likely will increase and 

customer service likely will decrease. 

VI. REQUESTED RELIEF 

40. Plaintiffs request that this Court: 

(a) adjudge and decree that Vulcan’s 

acquisition of Aggregates USA would be 

unlawful and violate Section 7 of the 

Clayton Act, 15 U.S.C. 18; 

(b) preliminarily and permanently 

enjoin and restrain the Defendants and 

all persons acting on their behalf from 

consummating the proposed acquisition 

of Aggregates USA by Vulcan, or from 

entering into or carrying out any other 

contract, agreement, plan, or 

understanding, the effect of which 

would be to combine Vulcan with 

Aggregates USA; 

(c) award Plaintiffs their costs for this 

action; and 

(d) award Plaintiffs such other and 

further relief as the Court deems just 

and proper. 

FOR PLAINTIFF UNITED STATES OF 

AMERICA: 

/s/ lllllllllllllllllll

Makan Delrahim 

Assistant Attorney General. 

/s/ lllllllllllllllllll

Andrew C. Finch 

Principal Deputy Assistant Attorney General. 

/s/ lllllllllllllllllll

Maribeth Petrizzi (DC Bar #435204) 

Chief, Defense, Industrials, and Aerospace 

Section. 

/s/ lllllllllllllllllll

Stephanie A. Fleming 

Assistant Chief, Defense, Industrials, and 

Aerospace Section. 

/s/ lllllllllllllllllll

Bernard A. Nigro Jr. (DC Bar #412357) 

Deputy Assistant Attorney General. 

/s/ lllllllllllllllllll

Patricia A. Brink 

Director of Civil Enforcement. 

/s/ lllllllllllllllllll

Jay D. Owen 

Stephen A. Harris 

Christine A. Hill (DC Bar #461048), 

Attorneys, United States Department of 

Justice, Antitrust Division, Defense, 

Industrials, and Aerospace Section, 450 Fifth 

Street NW, Suite 8700, Washington, DC 

20530, (202) 598–2987, jay.owen@usdoj.gov. 

Dated: December 22, 2017. 

FOR PLAINTIFF STATE OF TENNESSEE: 

Herbert H. Slatery III 

Attorney General and Reporter. 

/s/ lllllllllllllllllll

Victor J. Domen Jr. 

Senior Counsel, Tennessee Attorney 

General’s Office, 500 Charlotte Avenue, 

Nashville, TN 37202, Phone: 615–(253)–3327, 

vic.domen@ag.tn.gov. 

Dated: December 22, 2017. 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

United States of America and State of 

Tennessee, Plaintiffs, v. Vulcan Materials 

Company, SPO Partners II, L.P., and 

Aggregates USA, LLC, Defendants. 

Civil Action No: 1:17–cv–02761 

Judge: Amit Mehta 

PROPOSED FINAL JUDGMENT 

WHEREAS, Plaintiffs, United States of 

America and the State of Tennessee, 

filed their Complaint on December 22, 

Plaintiffs and Defendants, VulCan 

Materials Company, SPO Partners II, 

LP., and Aggregates USA, LLC, by their 

respective attorneys, have consented to 

the entry of this Final Judgment without 

trial or adjudication of any issue of fact 

or law, and without this Final Judgment 

constituting any evidence against or 

admission by any party regarding any 

issue of fact or law; 

AND WHEREAS, Defendants agree 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 the prompt and 

certain divestiture of certain rights or 

assets by the Defendants to assure that 

competition is not substantially 

lessened; 

AND WHEREAS, Plaintiffs require 

Defendants to make certain divestitures 


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for the purpose of remedying the loss of 

competition alleged in the Complaint; 

AND WHEREAS, Defendants have 

represented to Plaintiffs that the 

divestitures required below can and will 

be made and that Defendants will later 

raise no claim of hardship or difficulty 

as grounds for asking the Court to 

modify any of the divestiture provisions 

contained below; 

NOW THEREFORE, before any 

testimony is taken, without trial or 

adjudication of any issue of fact or law, 

and upon consent of the parties, it is 

ORDERED, ADJUDGED, AND 

DECREED: 

I. JURISDICTION 

This Court has jurisdiction over the 

subject matter of and each of the parties 

to this action. The Complaint states a 

claim upon which relief may be granted 

against Defendants under Section 7 of 

the Clayton Act, as amended (15 U.S.C. 

18). 

II. DEFINITIONS 

As used in this Final Judgment: 

A. ‘‘Acquirer’’ means Blue Water 

Industries or another entity to which 

Defendants divest the Divestiture 

Assets. 

B. ‘‘Vulcan’’ means Defendant Vulcan 

Materials Company, a corporation 

headquartered in Birmingham, 

Alabama, its successors and assigns, and 

its subsidiaries, divisions, groups, 

affiliates, partnerships, and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

C. ‘‘Aggregates USA’’ means 

Defendant Aggregates USA, LLC, a 

corporation headquartered in 

Indianapolis, Indiana, its successors and 

assigns, and its subsidiaries, divisions, 

groups, affiliates, partnerships, and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

D. ‘‘Blue Water Industries’’ means 

Blue Water Industries LLC, a wholly 

owned subsidiary of Blue Water 

Industries Holdings LLC, headquartered 

in Palm Beach, Florida, its successors 

and assigns, and its subsidiaries, 

divisions, groups, affiliates, 

partnerships, and joint ventures, and 

their directors, officers, managers, 

agents, and employees. 

E. ‘‘Divestiture Assets’’ means: 

1. Abingdon, Virginia Area 

Aggregates USA’s quarry located at 

21339 & 21490 Gravel Lake Rd., 

Abingdon, Virginia 24210; 

2. Tri-Cities, Tennessee Area 

a. Aggregates USA’s quarry located at 

350 W. Fourth Ave., Watauga, 

Tennessee 37694; 

b. Aggregates USA’s quarry located at 

210 Judger Ben Allen Rd., Elizabethton, 

Tennessee 37643; 

c. Aggregates USA’s quarry located at 

4175 Marbleton Rd., Unicoi, Tennessee 

37692; 

d. Aggregates USA’s quarry located at 

164 Asphalt Plant Rd., Jonesborough, 

Tennessee 37659; and 

e. Aggregates USA’s quarry located at 

736 Centenary Rd., Blountville, 

Tennessee 37617; 

3. Knoxville, Tennessee Area 

a. Aggregates USA’s quarry at 2107 

Big Hill Road, Lenoir City, Tennessee 

37772; 

b. Aggregates USA’s quarry at 2303 

Gov. John Sevier Hwy., Knoxville, 

Tennessee 37914; 

c. Aggregates USA’s quarry at 9600 

Mascot Rd., Mascot, Tennessee 37806; 

d. Aggregates USA’s quarry at 1949 E 

Raccoon Valley Rd., Heiskell, Tennessee 

37754; 

e. Aggregates USA’s quarry at 605 

Cherokee Explosives Rd., Rutledge, 

Tennessee 37861; 

f. Aggregates USA’s quarry at 450 and 

461 Rocktown Road, Jefferson City, 

Tennessee 37760; 

g. Aggregates USA’s quarry at 1001 

Park St., New Market, Tennessee 37820; 

h. Aggregates USA’s quarry at 1550 

Quarry Road, New Market, Tennessee 

37820; 

i. Aggregates USA’s Coy Stone Plant 

at 345 E. Broadway Blvd., Jefferson City, 

Tennessee 37760; 

j. Aggregates USA’s Coster Yard at 224 

Heiskell Ave., Knoxville, Tennessee 

37917; and 

k. Aggregates USA’s Young Yard at 

1977 West Andrew Johnson Highway, 

Strawberry Plains, Tennessee 37871. 

4. all tangible assets used at the 

quarries and yards listed in Paragraphs 

II(E)(1)–(3), including, but not limited 

to, all manufacturing equipment, 

tooling, and fixed assets, mining 

equipment, aggregate reserves, personal 

property, inventory, office furniture, 

materials, supplies, on- or off-site 

warehouses or storage facilities, and 

other tangible property and all assets 

used in connection with the facilities 

listed in Paragraphs II(E)(1)–(3); all 

licenses, permits, and authorizations 

issued by any governmental 

organization relating to the facilities 

listed in Paragraphs II(E)(1)–(3); all 

contracts, agreements, teaming 

arrangements, leases (including renewal 

rights), commitments, certifications and 

understandings, including sales 

agreements and supply agreements 

relating to the facilities listed in 

Paragraphs II(E)(1)–(3); all customer 

lists, contracts, accounts, and credit 

records; all repair and performance 

records and all other records relating to 

the facilities listed in Paragraphs 

II(E)(1)–(3); and 

5. all intangible assets used in the 

production and sale of aggregate at the 

quarries and yards listed in Paragraphs 

II(E)(1)–(3), including but not limited to, 

all contractual rights, patents, licenses 

and sublicenses, intellectual property, 

copyrights, trademarks, trade names, 

service marks, service names, technical 

information, computer software 

(including dispatch software and 

management information systems) and 

related documentation, know-how, 

trade secrets, drawings, blueprints, 

designs, design protocols, specifications 

for materials, specifications for parts 

and devices, safety procedures for the 

handling of materials and substances, 

quality assurance and control 

procedures, design tools and simulation 

capability, all manuals and technical 

information Defendants provide to their 

own employees, customers, suppliers, 

agents, or licensees, and all data 

(including aggregate reserve testing 

information) concerning the facilities 

listed in Paragraphs II(E)(1)–(3). 

III. APPLICABILITY 

A. This Final Judgment applies to 

Vulcan and Aggregates USA, as defined 

above, and all other persons in active 

concert or participation with any of 

them who receive actual notice of this 

Final Judgment by personal service or 

otherwise. 

B. If, prior to complying with Section 

IV and Section V of this Final Judgment, 

Defendants sell or otherwise dispose of 

all or substantially all of their assets or 

of lesser business units that include the 

Divestiture Assets, they shall require the 

purchaser to be bound by the provisions 

of this Final Judgment. Defendants need 

not obtain such an agreement from the 

acquirers of the assets divested pursuant 

to this Final Judgment. 

IV. DIVESTITURES 

A. Defendants are ordered and 

directed, within 45 calendar days after 

the Court’s signing of the Hold Separate 

Stipulation and Order in this matter, to 

divest the Divestiture Assets in a 

manner consistent with this Final 

Judgment to Blue Water Industries or an 

alternative Acquirer acceptable to the 

United States, in its sole discretion, after 

consultation with the State of 

Tennessee. The United States, in its sole 

discretion, may agree to one or more 

extensions of this time period not to 

exceed sixty (60) calendar days in total, 

and shall notify the Court in such 

circumstances. Defendants agree to use 

their best efforts to divest the 

Divestiture Assets as expeditiously as 

possible. 

B. In the event Defendants are 

attempting to divest the Divestiture 


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Assets to an Acquirer other than Blue 

Water Industries, Defendants promptly 

shall make known, by usual and 

customary means (to the extent 

Defendants have not already done so), 

the availability of the Divestiture Assets. 

Defendants shall inform any person 

making an inquiry regarding a possible 

purchase of the Divestiture Assets that 

they are being divested pursuant to this 

Final Judgment and provide that person 

with a copy of this Final Judgment. 

C. In accomplishing the divestitures 

ordered by this Final Judgment, 

Defendants shall offer to furnish to all 

prospective Acquirers, subject to 

customary confidentiality assurances, 

all information and documents relating 

to the Divestiture Assets customarily 

provided in a due diligence process 

except such information or documents 

subject to the attorney-client privileges 

or work-product doctrine. Defendants 

shall make available such information to 

the United States at the same time that 

such information is made available to 

any other person. 

D. Defendants shall provide the 

Acquirer and the United States with 

information relating to the personnel 

involved in the operation of the 

Divestiture Assets to enable the 

Acquirer to make offers of employment. 

Defendants will not interfere with any 

negotiations by the Acquirer to employ 

any Defendant employee whose primary 

responsibility is the operation of the 

Divestiture Assets. 

E. Defendants shall permit 

prospective Acquirers of the Divestiture 

Assets to have reasonable access to 

personnel and to make inspections of 

the physical facilities of the Divestiture 

Assets; access to any and all 

environmental, zoning, and other permit 

documents and information; and access 

to any and all financial, operational, or 

other documents and information 

customarily provided as part of a due 

diligence process. 

F. Defendants shall warrant to the 

Acquirer that each asset will be 

operational on the date of sale. 

G. Defendants shall not take any 

action that will impede in any way the 

permitting, operation, or divestiture of 

the Divestiture Assets. 

H. Defendants shall warrant to the 

Acquirer that (1) there are no material 

defects in the environmental, zoning, or 

other permits pertaining to the 

operation of each asset, and (2) 

following the sale of the Divestiture 

Assets, Defendants will not undertake, 

directly or indirectly, any challenges to 

the environmental, zoning, or other 

permits relating to the operation of the 

Divestiture Assets. 

I. Unless the United States otherwise 

consents in writing, the divestitures 

pursuant to Section IV, or by Divestiture 

Trustee appointed pursuant to Section 

V, of this Final Judgment, shall include 

the entire Divestiture Assets, and shall 

be accomplished in such a way as to 

satisfy the United States, in its sole 

discretion, after consultation with the 

State of Tennessee, that the Divestiture 

Assets can and will be used by the 

Acquirer as part of a viable, ongoing 

business in the production and sale of 

DOT-qualified coarse aggregate. The 

divestitures, whether pursuant to 

Section IV or Section V of this Final 

Judgment, 

(1) shall be made to an Acquirer that, in 

the United States’ sole judgment, after 

consultation with the State of Tennessee, has 

the intent and capability (including the 

necessary managerial, operational, technical, 

and financial capability) of competing 

effectively in the business of producing and 

selling DOT-qualified coarse aggregate; and 

(2) shall be accomplished so as to satisfy 

the United States, in its sole discretion, after 

consultation with the State of Tennessee, that 

none of the terms of any agreement between 

an Acquirer and Defendants give Defendants 

the ability unreasonably to raise the 

Acquirer’s costs, to lower the Acquirer’s 

efficiency, or otherwise to interfere in the 

ability of the Acquirer to compete effectively. 

V. APPOINTMENT OF DIVESTITURE 

TRUSTEE 

A. If Defendants have not divested the 

Divestiture Assets within the time 

period specified in Paragraph IV(A), 

Defendants shall notify the United 

States and the State of Tennessee of that 

fact in writing. Upon application of the 

United States, the Court shall appoint a 

Divestiture Trustee selected by the 

United States and approved by the 

Court to effect the divestiture of the 

Divestiture Assets. 

B. After the appointment of a 

Divestiture Trustee becomes effective, 

only the Divestiture Trustee shall have 

the right to sell the Divestiture Assets. 

The Divestiture Trustee shall have the 

power and authority to accomplish the 

divestitures to an Acquirer acceptable to 

the United States, after consultation 

with the State of Tennessee, at such 

price and on such terms as are then 

obtainable upon reasonable effort by the 

Divestiture Trustee, subject to the 

provisions of Sections IV, V, and VI of 

this Final Judgment, and shall have 

such other powers as this Court deems 

appropriate. Subject to Paragraph V(D) 

of this Final Judgment, the Divestiture 

Trustee may hire at the cost and 

expense of Defendants any investment 

bankers, attorneys, or other agents, who 

shall be solely accountable to the 

Divestiture Trustee, reasonably 

necessary in the Divestiture Trustee’s 

judgment to assist in the divestitures. 

Any such investment bankers, attorneys, 

or other agents shall serve on such terms 

and conditions as the United States 

approves, including confidentiality 

requirements and conflict of interest 

certifications. 

C. Defendants shall not object to a sale 

by the Divestiture Trustee on any 

ground other than the Divestiture 

Trustee’s malfeasance. Any such 

objections by Defendants must be 

conveyed in writing to the United States 

and the Divestiture Trustee within ten 

(10) calendar days after the Divestiture 

Trustee has provided the notice 

required under Section VI. 

D. The Divestiture Trustee shall serve 

at the cost and expense of Defendants 

pursuant to a written agreement, on 

such terms and conditions as the United 

States approves, including 

confidentiality requirements and 

conflict of interest certifications. The 

Divestiture Trustee shall account for all 

monies derived from the sale of the 

assets sold by the Divestiture Trustee 

and all costs and expenses so incurred. 

After approval by the Court of the 

Divestiture Trustee’s accounting, 

including fees for its services yet unpaid 

and those of any professionals and 

agents retained by the Divestiture 

Trustee, all remaining money shall be 

paid to Defendants and the trust shall 

then be terminated. The compensation 

of the Divestiture Trustee and any 

professionals and agents retained by the 

Divestiture Trustee shall be reasonable 

in light of the value of the Divestiture 

Assets and based on a fee arrangement 

providing the Divestiture Trustee with 

an incentive based on the price and 

terms of the divestitures and the speed 

with which it is accomplished, but 

timeliness is paramount. If the 

Divestiture Trustee and Defendants are 

unable to reach agreement on the 

Divestiture Trustee’s or any agents’ or 

consultants’ compensation or other 

terms and conditions of engagement 

within 14 calendar days of appointment 

of the Divestiture Trustee, the United 

States may, in its sole discretion, take 

appropriate action, including making a 

recommendation to the Court. The 

Divestiture Trustee shall, within three 

(3) business days of hiring any other 

professionals or agents, provide written 

notice of such hiring and the rate of 

compensation to Defendants and the 

United States. 

E. Defendants shall use their best 

efforts to assist the Divestiture Trustee 

in accomplishing the required 

divestitures. The Divestiture Trustee 

and any consultants, accountants, 

attorneys, and other agents retained by 


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the Divestiture Trustee shall have full 

and complete access to the personnel, 

books, records, and facilities of the 

business to be divested, and Defendants 

shall develop financial and other 

information relevant to such business as 

the Divestiture Trustee may reasonably 

request, subject to reasonable protection 

for trade secret or other confidential 

research, development, or commercial 

information or any applicable 

privileges. Defendants shall take no 

action to interfere with or to impede the 

Divestiture Trustee’s accomplishment of 

the divestitures. 

F. After its appointment, the 

Divestiture Trustee shall file monthly 

reports with the United States and, as 

appropriate, the Court setting forth the 

Divestiture Trustee’s efforts to 

accomplish the divestitures ordered 

under this Final Judgment. To the extent 

such reports contain information that 

the Divestiture Trustee deems 

confidential, such reports shall not be 

filed in the public docket of the Court. 

Such reports shall include the name, 

address, and telephone number of each 

person who, during the preceding 

month, 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 Divestiture 

Assets, and shall describe in detail each 

contact with any such person. The 

Divestiture Trustee shall maintain full 

records of all efforts made to divest the 

Divestiture Assets. 

G. If the Divestiture Trustee has not 

accomplished the divestitures ordered 

under this Final Judgment within six 

months after its appointment, the 

Divestiture Trustee shall promptly file 

with the Court a report setting forth (1) 

the Divestiture Trustee’s efforts to 

accomplish the required divestitures, (2) 

the reasons, in the Divestiture Trustee’s 

judgment, why the required divestitures 

have not been accomplished, and (3) the 

Divestiture Trustee’s recommendations. 

To the extent such reports contain 

information that the Divestiture Trustee 

deems confidential, such reports shall 

not be filed in the public docket of the 

Court. The Divestiture Trustee shall at 

the same time furnish such report to the 

United States which shall have the right 

to make additional recommendations 

consistent with the purpose of the trust. 

The Court thereafter shall enter such 

orders as it shall deem appropriate to 

carry out the purpose of the Final 

Judgment, which may, if necessary, 

include extending the trust and the term 

of the Divestiture Trustee’s appointment 

by a period requested by the United 

States. 

H. If the United States determines that 

the Divestiture Trustee has ceased to act 

or failed to act diligently or in a 

reasonably cost-effective manner, it may 

recommend the Court appoint a 

substitute Divestiture Trustee. 

VI. NOTICE OF PROPOSED 

DIVESTITURES 

A. Within two (2) business days 

following execution of a definitive 

divestiture agreement, Defendants or the 

Divestiture Trustee, whichever is then 

responsible for effecting the divestitures 

required herein, shall notify the United 

States and the State of Tennessee of any 

proposed divestitures required by 

Section IV or Section V of this Final 

Judgment. If the Divestiture Trustee is 

responsible, it shall similarly notify 

Defendants. The notice shall set forth 

the details of the proposed divestitures 

and list the name, address, and 

telephone number of each person not 

previously identified who offered or 

expressed an interest in or desire to 

acquire any ownership interest in the 

Divestiture Assets, together with full 

details of the same. 

B. Within fifteen (15) calendar days of 

receipt by the United States of such 

notice, the United States, after 

consultation with the State of 

Tennessee, may request from 

Defendants, the proposed Acquirer, any 

other third party, or the Divestiture 

Trustee, if applicable, additional 

information concerning the proposed 

divestitures, the proposed Acquirer, and 

any other potential Acquirer. 

Defendants and the Divestiture Trustee 

shall furnish any additional information 

requested within fifteen (15) calendar 

days of the receipt of the request, unless 

the parties shall otherwise agree. 

C. Within thirty (30) calendar days 

after receipt of the notice or within 

twenty (20) calendar days after the 

United States has been provided the 

additional information requested from 

Defendants, the proposed Acquirer, any 

third party, and the Divestiture Trustee, 

whichever is later, the United States 

shall provide written notice to 

Defendants and the Divestiture Trustee, 

if there is one, stating whether or not it 

objects to the proposed divestitures. If 

the United States provides written 

notice that it does not object, the 

divestitures may be consummated, 

subject only to Defendants’ limited right 

to object to the sale under Paragraph 

V(C) of this Final Judgment. Absent 

written notice that the United States 

does not object to the proposed Acquirer 

or upon objection by the United States, 

the divestitures proposed under Section 

IV or Section V shall not be 

consummated. Upon objection by 

Defendants under Paragraph V(C), the 

divestitures proposed under Section V 

shall not be consummated unless 

approved by the Court. 

VII. FINANCING 

Defendants shall not finance all or 

any part of any purchase made pursuant 

to Section IV or Section V of this Final 

Judgment. 

VIII. HOLD SEPARATE 

Until the divestitures required by this 

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 

divestitures ordered by this Court. 

IX. AFFIDAVITS 

A. Within twenty (20) calendar days 

of the filing of the Complaint in this 

matter, and every thirty (30) calendar 

days thereafter until the divestitures 

have been completed under Section IV 

or Section V, Defendants shall deliver to 

the United States an affidavit, signed by 

each Defendant’s Chief Financial Officer 

and General Counsel, which shall 

describe the fact and manner of 

Defendants’ compliance with Section IV 

or Section V of this Final Judgment. 

Each such affidavit shall include the 

name, address, and telephone number of 

each person who, during the preceding 

thirty (30) calendar days, 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 Divestiture Assets, 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 Defendants 

have taken to solicit buyers for the 

Divestiture Assets, and to provide 

required information to prospective 

Acquirers, including the limitations, if 

any, on such information. Assuming the 

information set forth in the affidavit is 

true and complete, any objection by the 

United States to information provided 

by Defendants, including limitation on 

information, shall be made within 

fourteen (14) calendar days of receipt of 

such affidavit. 

B. Within twenty (20) calendar days 

of the filing of the Complaint in this 

matter, Defendants shall deliver to the 

United States an affidavit that describes 

in reasonable detail all actions 

Defendants have taken and all steps 

Defendants have implemented on an 

ongoing basis to comply with Section 

VIII of this Final Judgment. Defendants 

shall deliver to the United States an 


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affidavit describing any changes to the 

efforts and actions outlined in 

Defendants’ earlier affidavits filed 

pursuant to this section within fifteen 

(15) calendar days after the change is 

implemented. 

C. Defendants shall keep all records of 

all efforts made to preserve and divest 

the Divestiture Assets until one year 

after such divestitures have been 

completed. 

X. COMPLIANCE INSPECTION 

A. For the purposes of determining or 

securing compliance with this Final 

Judgment, or of any related orders such 

as any Hold Separate Stipulation and 

Order, or of determining whether the 

Final Judgment should be modified or 

vacated, and subject to any legallyrecognized privilege, from time to time 

authorized representatives of the United 

States Department of Justice, including 

consultants and other persons retained 

by the United States, shall, upon written 

request of an authorized representative 

of the Assistant Attorney General in 

charge of the Antitrust Division, and on 

reasonable notice to Defendants, be 

permitted: 

(1) access during Defendants’ office hours 

to inspect and copy, or at the option of the 

United States, to require Defendants to 

provide hard copy or electronic copies of, all 

books, ledgers, accounts, records, data, and 

documents in the possession, custody, or 

control of Defendants, relating to any matters 

contained in this Final Judgment; and 

(2) to interview, either informally or on the 

record, Defendants’ officers, employees, or 

agents, who may have their individual 

counsel present, regarding such matters. The 

interviews shall be subject to the reasonable 

convenience of the interviewee and without 

restraint or interference by Defendants. 

B. Upon the written request of an 

authorized representative of the 

Assistant Attorney General in charge of 

the Antitrust Division, Defendants shall 

submit written reports or response to 

written interrogatories, under oath if 

requested, relating to any of the matters 

contained in this Final Judgment as may 

be requested. 

C. No information or documents 

obtained by the means provided in this 

section shall be divulged by the United 

States to any person other than an 

authorized representative of the 

executive branch of the United States, or 

the Tennessee Attorney General’s 

Office, 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 Defendants 

to the United States, Defendants 

represent and identify in writing the 

material in any such information or 

documents to which a claim of 

protection may be asserted under Rule 

26(c)(1)(G) of the Federal Rules of Civil 

Procedure, and Defendants mark each 

pertinent page of such material, 

‘‘Subject to claim of protection under 

Rule 26(c)(1)(G) of the Federal Rules of 

Civil Procedure,’’ then the United States 

shall give Defendants ten (10) calendar 

days’ notice prior to divulging such 

material in any legal proceeding (other 

than a grand jury proceeding). 

XI. NOTIFICATION 

Unless such transaction is otherwise 

subject to the reporting and waiting 

period requirements of the Hart-ScottRodino Antitrust Improvements Act of 

1976, as amended, 15 U.S.C. 18a (the 

‘‘HSR Act’’), Defendants, without 

providing advance notification to the 

United States, shall not directly or 

indirectly acquire any assets of or any 

interest, including any financial, 

security, loan, equity, or management 

interest, related to the production and 

sale of DOT-qualified coarse aggregate 

in Knox, Loudon, Jefferson, Grainger, 

Washington, Sullivan, Carter, and 

Unicoi Counties in Tennessee, or 

Washington County, Virginia, during 

the term of this Final Judgment. 

Such notification shall be provided to 

the Antitrust Division of the U.S. 

Department of Justice in the same 

format as, and per the instructions 

relating to, the Notification and Report 

Form set forth in the Appendix to Part 

803 of Title 16 of the Code of Federal 

Regulations as amended, except that the 

information requested in Items 5 

through 9 of the instructions must be 

provided only about the production and 

sale of DOT-qualified coarse aggregate. 

Notification shall be provided at least 

thirty (30) calendar days prior to 

acquiring any such interest, and shall 

include, beyond what may be required 

by the applicable instructions, the 

names of the principal representatives 

of the parties to the agreement who 

negotiated the agreement, and any 

management or strategic plans 

discussing the proposed transaction. If 

within the 30-day period after 

notification, representatives of the 

Antitrust Division make a written 

request for additional information, 

Defendants shall not consummate the 

proposed transaction or agreement until 

thirty (30) calendar days after 

submitting all such additional 

information. Early termination of the 

waiting periods in this paragraph may 

be requested and, where appropriate, 

granted in the same manner as is 

applicable under the requirements and 

provisions of the HSR Act and rules 

promulgated thereunder. This Section 

shall be broadly construed and any 

ambiguity or uncertainty regarding the 

filing of notice under this Section shall 

be resolved in favor of filing notice. 

XII. NO REACQUISITION 

Defendants may not reacquire any 

part of the Divestiture Assets during the 

term of this Final Judgment. 

XIII. RETENTION OF JURISDICTION 

This Court retains jurisdiction to 

enable any party to this Final Judgment 

to apply to this Court at any time for 

further orders and directions as may be 

necessary or appropriate to carry out or 

construe this Final Judgment, to modify 

any of its provisions, to enforce 

compliance, and to punish violations of 

its provisions. 

XIV. ENFORCEMENT OF FINAL 

JUDGMENT 

A. The United States retains and 

reserves all rights to enforce the 

provisions of this Final Judgment, 

including its right to seek an order of 

contempt from this Court. Defendants 

agree that in any civil contempt action, 

any motion to show cause, or any 

similar action brought by the United 

States regarding an alleged violation of 

this Final Judgment, the United States 

may establish a violation of the decree 

and the appropriateness of any remedy 

therefor by a preponderance of the 

evidence, and they waive any argument 

that a different standard of proof should 

apply. 

B. In any enforcement proceeding in 

which the Court finds that the 

Defendants have violated this Final 

Judgment, the United States may apply 

to the Court for a one-time extension of 

this Final Judgment, together with such 

other relief as may be appropriate. 

Defendants agree to reimburse the 

United States for any attorneys’ fees, 

experts’ fees, and costs incurred in 

connection with any effort to enforce 

this Final Judgment. 

XV. EXPIRATION OF FINAL 

JUDGMENT 

Unless this Court grants an extension, 

this Final Judgment shall expire ten (10) 

years from the date of its entry, except 

that after five (5) years from the date of 

its entry, this Final Judgment may be 

terminated upon notice by the United 

States to the Court and Defendants that 

the divestitures have been completed 

and that the continuation of the Final 

Judgment no longer is necessary or in 

the public interest. 


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XVI. PUBLIC INTEREST 

DETERMINATION 

Entry of this Final Judgment is in the 

public interest. The parties have 

complied with the requirements of the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16, including making copies 

available to the public of this Final 

Judgment, the Competitive Impact 

Statement, and any comments thereon, 

and the United States’ responses to 

comments. Based upon the record 

before the Court, which includes the 

Competitive Impact Statement and any 

comments and response to comments 

filed with the Court, entry of this Final 

Judgment is in the public interest. 

Date: 

Court approval subject to procedures of 

Antitrust Procedures and Penalties Act, 15 

U.S.C. 16. 

lllllllllllllllllllll

United States District Judge. 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

United States of America and State of 

Tennessee, Plaintiffs, v. Vulcan Materials 

Company, SPO PARTNERS II, L.P., and 

Aggregates USA, LLC, Defendants. 

Civil Action No: 1:17–cv–02761 

Judge: Amit Mehta 

COMPETITIVE IMPACT STATEMENT 

Plaintiff United States of America 

(‘‘United States’’), pursuant to Section 

2(b) of the Antitrust Procedures and 

Penalties Act (‘‘APPA’’ or ‘‘Tunney 

Act’’), 15 U.S.C. 16(b)–(h), files this 

Competitive Impact Statement relating 

to the proposed Final Judgment 

submitted for entry in this civil antitrust 

proceeding. 

I. NATURE AND PURPOSE OF THE 

PROCEEDING 

Defendant Vulcan Materials Company 

(‘‘Vulcan’’) and Defendant SPO Partners 

II, L.P. (‘‘SPO’’) entered into an 

agreement, dated May 25, 2017, 

pursuant to which Vulcan would 

acquire SPO’s aggregates business, 

Aggregates USA, LLC (‘‘Aggregates 

USA’’), for approximately $900 million. 

The United States and the State of 

Tennessee filed a civil antitrust 

Complaint on December 22, 2017, 

seeking to enjoin the proposed 

acquisition. The Complaint alleges that 

the likely effect of this proposed 

acquisition would be to substantially 

lessen competition in the production 

and sale of Department of 

Transportation (‘‘DOT’’)-qualified coarse 

aggregate in the Knoxville, Tri-Cities 

and Abingdon areas (the ‘Relevant 

Areas’’), in violation of Section 7 of the 

Clayton Act, 15 U.S.C. 18. This loss of 

competition likely would result in 

increased prices and decreased 

customer service for customers in those 

areas. 

At the same time the Complaint was 

filed, Plaintiffs also filed a Hold 

Separate Stipulation and Order (‘‘Hold 

Separate’’) and proposed Final 

Judgment, which are designed to 

eliminate the anticompetitive effects of 

the acquisition. Under the proposed 

Final Judgment, which is explained 

more fully below, Defendants are 

required, among other things, to divest 

Aggregates USA’s active quarries and 

yards in the Relevant Areas. Under the 

terms of the Hold Separate, Defendants 

will take certain steps to ensure that the 

quarries and yards are operated as a 

competitively independent, 

economically viable and ongoing 

business concern, that they will remain 

independent and uninfluenced by the 

consummation of the acquisition, and 

that competition is maintained during 

the pendency of the ordered 

divestitures. 

Plaintiffs 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. The Defendants and the Proposed 

Transaction 

Defendant Vulcan is incorporated in 

New Jersey with its headquarters in 

Birmingham, Alabama. Vulcan produces 

and sells coarse aggregate for the 

construction industry in 20 states as 

well as the District of Columbia. Vulcan 

also produces coarse aggregate in 

Mexico, which it distributes and sells at 

numerous terminals and yards along the 

Gulf Coast of the United States. In 2016, 

Vulcan reported net sales of $3.5 billion. 

Defendant SPO Partners is a Delaware 

limited partnership headquartered in 

Mill Valley, California. With more than 

$7 billion in assets under management, 

SPO Partners invests in a wide range of 

industries, including industrial 

materials, media, telecommunications, 

energy, power and real estate. SPO 

Partners acquired Aggregates USA in 

2010. 

Defendant Aggregates USA is 

headquartered in Birmingham, 

Alabama. Aggregates USA produces and 

sells coarse aggregate in four states: 

Florida, Georgia, Tennessee and 

Virginia. In 2016, Aggregates USA 

reported net sales of approximately 

$124 million. 

The proposed transaction, as initially 

agreed to by Defendants on May 25, 

2017, would lessen competition 

substantially as a result of Vulcan 

owning nearly all of the quarries and 

yards that supply DOT-qualified 

aggregate to the Relevant Areas. This 

acquisition is the subject of the 

Complaint and proposed Final 

Judgment filed by Plaintiffs on 

December 22, 2017. 

B. Coarse Aggregate is an Essential 

Input for Many Construction Projects 

Coarse aggregate is a category of 

material used for construction projects 

and in various industrial processes. 

Produced in quarries, mines, and gravel 

pits, coarse aggregate is predominantly 

limestone, granite, or trap rock. 

Different types and sizes of rock are 

needed to meet different specifications 

for use in asphalt concrete, ready mix 

concrete, industrial processes, and other 

products. Asphalt concrete consists of 

approximately 95 percent coarse 

aggregate, and ready mix concrete is 

made of up of approximately 75 percent 

coarse aggregate. Coarse aggregate thus 

is an integral input for road and other 

construction projects. 

For each construction project, a 

customer establishes specifications that 

must be met for each application for 

which coarse aggregate is used. For 

example, state DOTs, including the 

Tennessee and Virginia DOTs, set 

specifications for coarse aggregate used 

to produce asphalt concrete, ready mix 

concrete, and road base for state DOT 

projects. State DOTs specify 

characteristics such as hardness and 

durability, size, polish value, and a 

variety of other characteristics. The 

specifications are intended to ensure the 

longevity and safety of the projects that 

use coarse aggregate. 

For Tennessee and Virginia DOT 

projects, to ensure that the stone for an 

application meets proper specifications, 

the respective DOTs qualify quarries 

according to the end uses of the coarse 

aggregate. In addition, the Tennessee 

and Virginia DOTs test the coarse 

aggregate at various points: at the quarry 

before it is shipped; when the coarse 

aggregate is sent to the purchaser to 

produce an end product such as asphalt 

concrete; and after the end product has 

been produced. Many cities, counties, 

commercial entities, and individuals in 

Tennessee and Virginia use their 

respective state DOT-qualified coarse 

aggregate specifications when building 


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roads, bridges, and other construction 

projects in order to optimize longevity. 

C. Transportation is a Significant 

Component of the Cost of Coarse 

Aggregate 

Coarse aggregate is priced by the ton 

and is a relatively inexpensive product, 

with prices typically ranging from 

approximately five to twenty dollars per 

ton. A variety of approaches are used to 

price coarse aggregate. For small 

volumes, coarse aggregate often is sold 

according to a posted price. For large 

volumes, customers typically either 

negotiate prices for a particular job or 

seek bids from multiple coarse aggregate 

suppliers. 

In areas where coarse aggregate is 

locally available, it is transported from 

quarries to customers by truck. Truck 

transportation is expensive and, for 

construction projects located more than 

a few miles from a quarry, 

transportation costs can become a 

significant portion of the total cost of 

coarse aggregate. 

D. Relevant Markets 

1. State DOT-Qualified Coarse 

Aggregate is a Relevant Product Market 

Within the broad category of coarse 

aggregate, different types and sizes of 

stone are used for different purposes. 

For instance, coarse aggregate qualified 

for use as road base may not be the same 

size and type of rock as coarse aggregate 

qualified for use in asphalt concrete. 

Accordingly, they are not 

interchangeable for one another and 

demand for each is separate. Thus, each 

type and size of coarse aggregate likely 

is a separate line of commerce and a 

relevant product market within the 

meaning of Section 7 of the Clayton Act. 

State DOT-qualified coarse aggregate 

is coarse aggregate qualified by the state 

DOT for use in road construction in that 

particular state. State DOT-qualified 

coarse aggregate meets particular 

standards for size, physical 

composition, functional characteristics, 

end uses, and availability. A customer 

whose job specifies state DOT-qualified 

coarse aggregate cannot substitute nonDOT-qualified coarse aggregate or other 

materials, including coarse aggregate 

qualified by a different state DOT. 

Although numerous narrower product 

markets exist, the competitive dynamic 

for most types of state DOT-qualified 

coarse aggregate is nearly identical, as a 

quarry can typically produce all, or 

nearly all, types of state DOT-qualified 

coarse aggregate for a particular state. 

Therefore, most types of state DOTqualified coarse aggregate for a 

particular state may be combined for 

analytical convenience into a single 

relevant product market for the purpose 

of evaluating the competitive impact of 

the acquisition. 

A small but significant increase in the 

price of state DOT-qualified coarse 

aggregate would not cause a sufficient 

number of customers to substitute to 

another type of coarse aggregate or 

another material so as to make such a 

price increase unprofitable. 

Accordingly, the production and sale of 

Tennessee DOT-qualified coarse 

aggregate and Virginia DOT-qualified 

coarse aggregate (hereinafter ‘‘DOTqualified coarse aggregate’’) are distinct 

lines of commerce and relevant product 

markets within the meaning of Section 

7 of the Clayton Act. 

2. The Relevant Geographic Markets are 

Local 

Coarse aggregate is a relatively lowcost product that is bulky and heavy. As 

a result, the cost of transporting coarse 

aggregate is high as compared to the 

value of the product. 

When customers seek price quotes or 

bids, the distance from the quarry to the 

project site or plant location will have 

a considerable impact on the selection 

of a supplier, due to the high cost of 

transporting coarse aggregate relative to 

the low value of the product. Suppliers 

know the importance of transportation 

cost to a potential customer’s selection 

of a coarse aggregate supplier; they 

know the locations of their competitors, 

and they often will factor the cost of 

transportation from other suppliers into 

the price or bid that they submit. 

The primary factor that determines 

the area a supplier can serve is the 

location of competing quarries. When 

quoting prices or submitting bids, coarse 

aggregate suppliers will account for the 

location of the project site or plant, the 

cost of transporting coarse aggregate to 

the project site or plant, and the 

locations of the competitors that might 

bid on a job. Therefore, depending on 

the location of the project site or plant, 

suppliers are able to adjust their bids to 

account for the distance other 

competitors are from a job. 

a. The Knoxville area is a Relevant 

Geographic Market 

Vulcan owns and operates eleven 

quarries that serve Knox, Loudon, 

Jefferson, and Grainger Counties in 

Tennessee as well as portions of 

surrounding counties (hereinafter 

referred to as the ‘‘Knoxville area’’). 

Customers with plants or jobs in the 

Knoxville area may, depending on the 

location of their plant or job sites, also 

economically procure Tennessee DOTqualified coarse aggregate from four 

quarries operated by Aggregates USA. 

Other more distant quarries cannot 

compete successfully on a regular basis 

for customers with plants or jobs in the 

Knoxville area because they are too far 

away and transportation costs are too 

great. 

A small but significant postacquisition increase in the price of 

Tennessee DOT-qualified coarse 

aggregate to customers with plants or 

job sites in the Knoxville area would not 

cause those customers to procure coarse 

aggregate from suppliers other than 

Vulcan and Aggregates USA in 

sufficient quantities so as to make such 

a price increase unprofitable. 

Accordingly, the Knoxville area is a 

relevant geographic market for the 

production and sale of Tennessee DOTqualified coarse aggregate within the 

meaning of Section 7 of the Clayton Act. 

b. The Tri-Cities area is a Relevant 

Geographic Market 

Vulcan owns and operates four 

quarries that serve Washington, 

Sullivan, Carter and Unicoi Counties in 

Tennessee as well as portions of 

surrounding counties (hereinafter 

referred to as the ‘‘Tri-Cities area’’). 

Customers with plants or jobs in the TriCities area may, depending on the 

location of their plant or job site, also 

economically procure Tennessee DOTqualified coarse aggregate from five 

quarries operated by Aggregates USA. 

Other more distant quarries cannot 

compete successfully on a regular basis 

for customers with plants or jobs in the 

Tri-Cities area because they are too far 

away and transportation costs are too 

great. 

A small but significant postacquisition increase in the price of 

Tennessee DOT-qualified coarse 

aggregate to customers with plants or 

job sites in the Tri-Cities area would not 

cause those customers to procure coarse 

aggregate from suppliers other than 

Vulcan and Aggregates USA in 

sufficient quantities so as to make such 

a price increase unprofitable. 

Accordingly, the Tri-Cities area is a 

relevant geographic market for the 

production and sale of Tennessee DOTqualified coarse aggregate within the 

meaning of Section 7 of the Clayton Act. 

c. The Abingdon area is a Relevant 

Geographic Market 

Vulcan owns and operates one quarry 

that serves parts of Washington County 

in Virginia and portions of surrounding 

counties (hereinafter referred to as the 

‘‘Abingdon area’’). Customers with 

plants or jobs in the Abingdon area may, 

depending on the location of their plant 

or job sites, also economically procure 


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Virginia DOT-qualified coarse aggregate 

from a quarry operated by Aggregates 

USA. Other more distant quarries 

cannot compete successfully on a 

regular basis for customers with plants 

or jobs in the Abingdon area because 

they are too far away and transportation 

costs are too great. 

A small but significant postacquisition increase in the price of 

Virginia DOT-qualified coarse aggregate 

to customers with plants or job sites in 

the Abingdon area would not cause 

those customers to procure coarse 

aggregate from suppliers other than 

Vulcan and Aggregates USA in 

sufficient quantities so as to make such 

a price increase unprofitable. 

Accordingly, the Abingdon area is a 

relevant geographic market for the 

production and sale of Virginia DOTqualified coarse aggregate within the 

meaning of Section 7 of the Clayton Act. 

E. Vulcan’s Acquisition of Aggregates 

USA is Anticompetitive 

Vigorous competition between Vulcan 

and Aggregates USA on price and 

customer service in the production and 

sale of DOT-qualified coarse aggregate 

has benefitted customers in the Relevant 

Areas, all of which face similar 

competitive conditions. 

The competitors that could constrain 

Vulcan and Aggregates USA from 

raising prices on DOT-qualified coarse 

aggregate in the Relevant Areas are 

limited to those who are qualified by the 

Tennessee and Virginia DOTs to supply 

coarse aggregate and can economically 

transport the coarse aggregate into these 

areas. 

Since the Relevant Areas are each 

exclusively served today by Vulcan and 

Aggregates USA, the proposed 

acquisition will reduce from two to one 

the number of suppliers of DOTqualified coarse aggregate in each of 

those areas. Further, the proposed 

acquisition will substantially increase 

the likelihood that Vulcan will 

unilaterally increase the price of DOTqualified coarse aggregate to a 

significant number of customers in the 

Relevant Areas. 

For many customers, a combined 

Vulcan and Aggregates USA will have 

the ability to increase prices for DOTqualified coarse aggregate. The 

combined firm could also decrease 

service for these same customers by 

limiting availability or delivery options. 

DOT-qualified coarse aggregate 

producers know the distance from their 

own quarries or yards and their 

competitors’ quarries to a customer’s job 

site. Generally, because of 

transportation costs, the farther a 

supplier’s closest competitor is from a 

job site, the higher the price and margin 

that supplier can expect for that project. 

Post-acquisition, in instances where 

Vulcan and Aggregates USA quarries or 

yards are the closest locations to a 

customer’s project, the combined firm, 

using the knowledge of its competitors’ 

locations, will be able to charge such 

customers higher prices or decrease the 

level of customer service. 

The proposed acquisition will 

substantially lessen competition in the 

market for the production and sale of 

DOT-qualified coarse aggregate in the 

Relevant Areas, which is likely to lead 

to higher prices and reduced customer 

service for consumers of such products, 

in violation of Section 7 of the Clayton 

Act. 

III. EXPLANATION OF THE 

PROPOSED FINAL JUDGMENT 

A. Divestiture Provisions 

The divestiture requirement of the 

proposed Final Judgment will eliminate 

the anticompetitive effects of the 

acquisition in the production and sale of 

DOT-qualified coarse aggregate in the 

Knoxville, Tri-Cities and Abingdon 

areas by establishing a new, 

independent, and economically viable 

competitor. Paragraph IV(A) of the 

proposed Final Judgment requires 

Defendants to divest, as a viable, 

ongoing business, Aggregates USA’s 

active quarries and yards in the 

Relevant Areas to Blue Water Industries 

LLC or an alternative Acquirer 

acceptable to the United States, in its 

sole discretion, after consultation with 

the State of Tennessee, within forty-five 

(45) days after the signing of the Hold 

Separate. The assets must be divested in 

such a way as to satisfy the United 

States in its sole discretion, after 

consultation with the State of 

Tennessee, that the operations can and 

will be operated by the purchaser as a 

viable, ongoing business that can 

compete effectively in the relevant 

markets. Defendants must take all 

reasonable steps necessary to 

accomplish the divestitures quickly and 

shall cooperate with prospective 

purchasers. 

The proposed Final Judgment also 

contains provisions intended to 

facilitate the Acquirer’s efforts to hire 

the employees involved with the 

Aggregates USA business. Paragraph 

IV(D) of the proposed Final Judgment 

requires Defendants to provide the 

Acquirer with information relating to 

the personnel involved in the operation 

of the Divestiture Assets to enable the 

Acquirer to make offers of employment, 

and provides that Defendants will not 

interfere with any negotiations by the 

Acquirer to hire these employees. 

In the event that Defendants do not 

accomplish the divestitures within the 

period prescribed in the proposed Final 

Judgment, Paragraph V(A) of the Final 

Judgment provides that the Court will 

appoint a trustee selected by the United 

States to effect the divestitures. If a 

trustee is appointed, Paragraph V(D) of 

the proposed Final Judgment provides 

that Defendants will pay all costs and 

expenses of the trustee. The trustee’s 

commission will be structured so as to 

provide an incentive for the trustee 

based on the price obtained and the 

speed with which the divestitures are 

accomplished. Paragraph V(F) of the 

proposed Final Judgment requires that, 

after his or her appointment becomes 

effective, the trustee will file monthly 

reports with the Court and the United 

States setting forth his or her efforts to 

accomplish the divestitures. Paragraph 

V(G) of the proposed Final Judgment 

requires that, at the end of six months, 

if the divestitures have not been 

accomplished, the trustee and the 

United States will make 

recommendations to the Court, which 

shall enter such orders as appropriate, 

in order to carry out the purpose of the 

trust, including extending the trust or 

the term of the trustee’s appointment. 

B. Notification 

Section XI of the proposed Final 

Judgment requires Defendants to 

provide notification to the Antitrust 

Division of certain proposed 

acquisitions not otherwise subject to 

filing under the Hart-Scott-Rodino Act, 

15 U.S.C 18a (the ‘‘HSR Act’’), and in 

the same format as, and per the 

instructions relating to the notification 

required under that statute. The 

notification requirement applies in the 

case of any direct or indirect 

acquisitions of any assets related to the 

production and sale of DOT-qualified 

coarse aggregate in Knox, Loudon, 

Jefferson, Grainger, Washington, 

Sullivan, Carter, and Unicoi Counties in 

Tennessee, or Washington County, 

Virginia, during the term of the 

proposed Final Judgment. Section XI 

further provides for waiting periods and 

opportunities for the United States to 

obtain additional information similar to 

the provisions of the HSR Act before 

such acquisitions can be consummated. 

C. Enforcement and Expiration of the 

Final Judgment 

The proposed Final Judgment 

contains provisions designed to promote 

compliance and make the enforcement 

of Division consent decrees as effective 

as possible. Paragraph XIV(A) provides 


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that the United States retains and 

reserves all rights to enforce the 

provisions of the proposed Final 

Judgment, including its rights to seek an 

order of contempt from the Court. Under 

the terms of this paragraph, Defendants 

have agreed that in any civil contempt 

action, any motion to show cause, or 

any similar action brought by the United 

States regarding an alleged violation of 

the Final Judgment, the United States 

may establish the violation and the 

appropriateness of any remedy by a 

preponderance of the evidence and that 

Defendants have waived any argument 

that a different standard of proof should 

apply. This provision aligns the 

standard for compliance obligations 

with the standard of proof that applies 

to the underlying offense that the 

compliance commitments address. 

Paragraph XIV(B) of the proposed 

Final Judgment further provides that 

should the Court find in an enforcement 

proceeding that Defendants have 

violated the Final Judgment, the United 

States may apply to the Court for a onetime extension of the Final Judgment, 

together with such other relief as may be 

appropriate. In addition, in order to 

compensate American taxpayers for any 

costs associated with the investigation 

and enforcement of violations of the 

proposed Final Judgment, Paragraph 

XIV(B) requires Defendants to reimburse 

the United States for attorneys’ fees, 

experts’ fees, or costs incurred in 

connection with any enforcement effort. 

Finally, Section XV of the proposed 

Final Judgment provides that the Final 

Judgment shall expire ten (10) years 

from the date of its entry, except that 

after five (5) years from the date of its 

entry, the Final Judgment may be 

terminated upon notice by the United 

States to the Court and Defendants that 

the divestitures have been completed 

and that the continuation of the Final 

Judgment is no longer necessary or in 

the public interest. 

IV. REMEDIES AVAILABLE TO 

POTENTIAL PRIVATE LITIGANTS 

Section 4 of the Clayton Act, 15 

U.S.C. 15, provides that any person who 

has been injured as a result of conduct 

prohibited by the antitrust laws may 

bring suit in federal court to recover 

three times the damages the person has 

suffered, as well as costs and reasonable 

attorneys’ fees. Entry of the proposed 

Final Judgment will neither impair nor 

assist the bringing of any private 

antitrust damage action. Under the 

provisions of Section 5(a) of the Clayton 

Act, 15 U.S.C. 16(a), the proposed Final 

Judgment has no prima facie effect in 

any subsequent private lawsuit that may 

be brought against Defendants. 

V. PROCEDURES AVAILABLE FOR 

MODIFICATION OF THE PROPOSED 

FINAL JUDGMENT 

Plaintiffs and Defendants have 

stipulated that the proposed Final 

Judgment may be entered by the Court 

after compliance with the provisions of 

the APPA, provided that the United 

States has not withdrawn its consent. 

The APPA conditions entry upon the 

Court’s determination that the proposed 

Final Judgment is in the public interest. 

The APPA provides a period of at 

least sixty (60) days preceding the 

effective date of the proposed Final 

Judgment within which any person may 

submit to the United States written 

comments regarding the proposed Final 

Judgment. Any person who wishes to 

comment should do so within sixty (60) 

days of the date of publication of this 

Competitive Impact Statement in the 

Federal Register, or the last date of 

publication in a newspaper of the 

summary of this Competitive Impact 

Statement, whichever is later. All 

comments received during this period 

will be considered by the United States 

Department of Justice, which remains 

free to withdraw its consent to the 

proposed Final Judgment at any time 

prior to the Court’s entry of judgment. 

The comments and the response of the 

United States will be filed with the 

Court. In addition, comments will be 

posted on the U.S. Department of 

Justice, Antitrust Division’s internet 

website and, under certain 

circumstances, published in the Federal 

Register. 

Written comments should be 

submitted to: 

Maribeth Petrizzi, Chief, Defense, 

Industrials, and Aerospace Section, 

Antitrust Division, United States 

Department of Justice, 450 Fifth 

Street, NW, Suite 8700, 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 

Plaintiffs considered, as an alternative 

to the proposed Final Judgment, a full 

trial on the merits against Defendants. 

Plaintiffs could have continued the 

litigation and sought preliminary and 

permanent injunctions against Vulcan’s 

acquisition of Aggregates USA. Plaintiffs 

are satisfied, however, that the 

divestiture of assets described in the 

proposed Final Judgment will preserve 

competition for the production and sale 

of DOT-qualified coarse aggregate in the 

Relevant Areas. Thus, the proposed 

Final Judgment would achieve all or 

substantially all of the relief Plaintiffs 

would have obtained through litigation, 

but avoids the time, expense, and 

uncertainty of a full trial on the merits 

of the Complaint. 

VII. STANDARD OF REVIEW UNDER 

THE APPA FOR THE PROPOSED 

FINAL JUDGMENT 

The Clayton Act, as amended by the 

APPA, requires that proposed consent 

judgments in antitrust cases brought by 

the United States be subject to a sixtyday comment period, after which the 

court shall determine whether entry of 

the proposed Final Judgment ‘‘is in the 

public interest.’’ 15 U.S.C. 16(e)(1). In 

making that determination, the court, in 

accordance with the statute as amended 

in 2004, is required to consider: 

(A) the competitive impact of such 

judgment, including termination of alleged 

violations, provisions for enforcement and 

modification, duration of relief sought, 

anticipated effects of alternative remedies 

actually considered, whether its terms are 

ambiguous, and any other competitive 

considerations bearing upon the adequacy of 

such judgment that the court deems 

necessary to a determination of whether the 

consent judgment is in the public interest; 

and 

(B) the impact of entry of such judgment 

upon competition in the relevant market or 

markets, upon the public generally and 

individuals alleging specific injury from the 

violations set forth in the complaint 

including consideration of the public benefit, 

if any, to be derived from a determination of 

the issues at trial. 

15 U.S.C. 16(e)(1)(A) & (B). In 

considering these statutory factors, the 

court’s inquiry is necessarily a limited 

one as the government is entitled to 

‘‘broad discretion to settle with the 

defendant within the reaches of the 

public interest.’’ United States v. 

Microsoft Corp., 56 F.3d 1448, 1461 

(D.C. Cir. 1995); see generally United 

States v. SBC Commc’ns, Inc., 489 F. 

Supp. 2d 1 (D.D.C. 2007) (assessing 

public interest standard under the 

Tunney Act); United States v. U.S. 

Airways Group, Inc., 38 F. Supp. 3d 69, 

75 (D.D.C. 2014) (noting the court has 

broad discretion of the adequacy of the 

relief at issue); United States v. InBev 

N.V./S.A., No. 08–1965 (JR), 2009–2 

Trade Cas. (CCH) ¶ 76,736, 2009 U.S. 

Dist. LEXIS 84787, at *3, (D.D.C. Aug. 

11, 2009) (noting that the court’s review 

of a consent judgment is limited and 

only inquires ‘‘into whether the 

government’s determination that the 

proposed remedies will cure the 

antitrust violations alleged in the 


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1The 2004 amendments substituted ‘‘shall’’ for 

‘‘may’’ in directing relevant factors for court to 

consider and amended the list of factors to focus on 

competitive considerations and to address 

potentially ambiguous judgment terms. Compare 15 

U.S.C. 16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); 

see also SBC Commc’ns, 489 F. Supp. 2d at 11 

(concluding that the 2004 amendments ‘‘effected 

minimal changes’’ to Tunney Act review). 

2Cf. BNS, 858 F.2d at 464 (holding that the 

court’s ‘‘ultimate authority under the [APPA] is 

limited to approving or disapproving the consent 

decree’’); United States v. Gillette Co., 406 F. Supp. 

713, 716 (D. Mass. 1975) (noting that, in this way, 

the court is constrained to ‘‘look at the overall 

picture not hypercritically, nor with a microscope, 

but with an artist’s reducing glass’’). See generally 

Microsoft, 56 F.3d at 1461 (discussing whether ‘‘the 

remedies [obtained in the decree are] so 

inconsonant with the allegations charged as to fall 

outside of the ‘reaches of the public interest’ ’’). 

3See United States v. Enova Corp., 107 F. Supp. 

2d 10, 17 (D.D.C. 2000) (noting that the ‘‘Tunney 

Act expressly allows the court to make its public 

interest determination on the basis of the 

competitive impact statement and response to 

comments alone’’); United States v. Mid-Am. 

Dairymen, Inc., No. 73–CV–681–W–1, 1977–1 Trade 

Cas. (CCH) ¶ 61,508, at 71,980, *22 (W.D. Mo. 1977) 

(‘‘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.’’); S. Rep. No. 

93–298, at 6 (1973) (‘‘Where the public interest can 

be meaningfully evaluated simply on the basis of 

briefs and oral arguments, that is the approach that 

should be utilized.’’). 

complaint was reasonable, and whether 

the mechanism to enforce the final 

judgment are clear and manageable.’’).1

As the United States Court of Appeals 

for the District of Columbia Circuit has 

held, under the APPA a court considers, 

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 Microsoft, 56 

F.3d at 1458–62. 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. 1981)); see also Microsoft, 56 F.3d 

at 1460–62; United States v. Alcoa, Inc., 

152 F. Supp. 2d 37, 40 (D.D.C. 2001); 

InBev, 2009 U.S. Dist. LEXIS 84787, at 

*3. Courts have held that: 

[t]he 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. 

Bechtel, 648 F.2d at 666 (emphasis 

added) (citations omitted).2 In 

determining whether a proposed 

settlement is in the public interest, a 

district court ‘‘must accord deference to 

the government’s predictions about the 

efficacy of its remedies, and may not 

require that the remedies perfectly 

match the alleged violations.’’ SBC 

Commc’ns, 489 F. Supp. 2d at 17; see 

also U.S. Airways, 38 F. Supp. 3d at 75 

(noting that a court should not reject the 

proposed remedies because it believes 

others are preferable); Microsoft, 56 F.3d 

at 1461 (noting the need for courts to be 

‘‘deferential to the government’s 

predictions as to the effect of the 

proposed remedies’’); United States v. 

Archer-Daniels-Midland Co., 272 F. 

Supp. 2d 1, 6 (D.D.C. 2003) (noting that 

the court should grant due respect to the 

United States’ prediction as to the effect 

of proposed remedies, its perception of 

the market structure, and its views of 

the nature of the case). 

Courts have greater flexibility in 

approving proposed consent decrees 

than in crafting their own decrees 

following a finding of liability in a 

litigated matter. ‘‘[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.’ ’’ United 

States v. Am. Tel. & Tel. Co., 552 F. 

Supp. 131, 151 (D.D.C. 1982) (citations 

omitted) (quoting United States v. 

Gillette Co., 406 F. Supp. 713, 716 (D. 

Mass. 1975)), aff’d sub nom. Maryland 

v. United States, 460 U.S. 1001 (1983); 

see also U.S. Airways, 38 F. Supp. 3d at 

74 (noting that room must be made for 

the government to grant concessions in 

the negotiation process for settlements 

(citing Microsoft, 56 F.3d at 1461); 

United States v. Alcan Aluminum Ltd., 

605 F. Supp. 619, 622 (W.D. Ky. 1985) 

(approving the consent decree even 

though the court would have imposed a 

greater remedy). To meet this standard, 

the United States ‘‘need only provide a 

factual basis for concluding that the 

settlements are reasonably adequate 

remedies for the alleged harms.’’ SBC 

Commc’ns, 489 F. Supp. 2d at 17. 

Moreover, the court’s role under the 

APPA is limited to reviewing the 

remedy in relationship to the violations 

that the United States has alleged in its 

Complaint, and does not authorize the 

court to ‘‘construct [its] own 

hypothetical case and then evaluate the 

decree against that case.’’ Microsoft, 56 

F.3d at 1459; see also U.S. Airways, 38 

F. Supp. 3d at 74 (noting that the court 

must simply determine whether there is 

a factual foundation for the 

government’s decisions such that its 

conclusions regarding the proposed 

settlements are reasonable; InBev, 2009 

U.S. Dist. LEXIS 84787, at *20 (‘‘the 

‘public interest’ is not to be measured by 

comparing the violations alleged in the 

complaint against those the court 

believes could have, or even should 

have, been alleged’’). Because the 

‘‘court’s authority to review the decree 

depends entirely on the government’s 

exercising its prosecutorial discretion by 

bringing a case in the first place,’’ it 

follows that ‘‘the court is only 

authorized to review the decree itself,’’ 

and not to ‘‘effectively redraft the 

complaint’’ to inquire into other matters 

that the United States did not pursue. 

Microsoft, 56 F.3d at 1459–60. As this 

Court recently confirmed in SBC 

Communications, courts ‘‘cannot look 

beyond the complaint in making the 

public interest determination unless the 

complaint is drafted so narrowly as to 

make a mockery of judicial power.’’ SBC 

Commc’ns, 489 F. Supp. 2d at 15. 

In its 2004 amendments, Congress 

made clear its intent to preserve the 

practical benefits of utilizing consent 

decrees in antitrust enforcement, adding 

the unambiguous instruction that 

‘‘[n]othing in this section shall be 

construed to require the court to 

conduct an evidentiary hearing or to 

require the court to permit anyone to 

intervene.’’ 15 U.S.C. 16(e)(2); see also 

U.S. Airways, 38 F. Supp. 3d at 75 

(indicating that a court is not required 

to hold an evidentiary hearing or to 

permit intervenors as part of its review 

under the Tunney Act). The language 

wrote into the statute what Congress 

intended when it enacted the Tunney 

Act in 1974, as Senator Tunney 

explained: ‘‘[t]he 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. 24,598 (1973) (statement 

of Sen. Tunney). Rather, the procedure 

for the public interest determination is 

left to the discretion of the court, with 

the recognition that the court’s ‘‘scope 

of review remains sharply proscribed by 

precedent and the nature of Tunney Act 

proceedings.’’ SBC Commc’ns, 489 F. 

Supp. 2d at 11.3 A court can make its 

public interest determination based on 

the competitive impact statement and 


daltland on DSKBBV9HB2PROD with NOTICES
2200 Federal Register / Vol. 83, No. 10 / Tuesday, January 16, 2018 / Notices 

response to public comments alone. 

U.S. Airways, 38 F. Supp. 3d at 75. 

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. 

Dated: December 22, 2017. 

Respectfully Submitted, 

/s/ lllllllllllllllll

Jay D. Owen, 

United States Department of Justice, 

Antitrust Division, Defense, Industrials, 

and Aerospace Section, 450 Fifth Street 

NW, Suite 8700, Tel.: (202) 598–2987, 

Washington, DC 20530, Fax: (202) 514– 

9033, Email: jay.owen@usdoj.gov. 

[FR Doc. 2018–00578 Filed 1–12–18; 8:45 am] 

BILLING CODE 4410–11–P 

DEPARTMENT OF JUSTICE 

Antitrust Division 

Proposed Final Judgment and 

Competitive Impact Statement: United 

States v. TransDigm Group 

Incorporated 

Notice is hereby given pursuant to the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. § 16(b)–(h), that a proposed 

Final Judgment, Hold Separate 

Stipulation and Order, and Competitive 

Impact Statement have been filed with 

the United States District Court for the 

District of Columbia in United States of 

America v. TransDigm Group 

Incorporated, Civil Action No. 1:17–cv– 

2735. On December 21, 2017, the United 

States filed a Complaint alleging that 

TransDigm Group Incorporated’s 

(TransDigm) February 2017 acquisition 

of SCHROTH Safety Products GmbH 

and substantially all the assets of Takata 

Protection Systems, Inc. (collectively, 

‘‘SCHROTH’’) from Takata Corporation 

violated Section 7 of the Clayton Act, 15 

U.S.C. § 18. The proposed Final 

Judgment, filed at the same time as the 

Complaint, requires TransDigm to divest 

the entirety of SCHROTH. 

Copies of the Complaint, proposed 

Final Judgment, and Competitive Impact 

Statement are available for inspection 

on the Antitrust Division’s website at 

http://www.justice.gov/atr and at the 

Office of the Clerk of the United States 

District Court for the District of 

Columbia. Copies of these materials may 

be obtained from the Antitrust Division 

upon request and payment of the 

copying fee set by Department of Justice 

regulations. 

Public comment is invited within 60 

days of the date of this notice. Such 

comments, including the name of the 

submitter, and responses thereto, will be 

posted on the Antitrust Division’s 

website, filed with the Court, and, under 

certain circumstances, published in the 

Federal Register. Comments should be 

directed to Maribeth Petrizzi, Chief, 

Defense, Industrials, and Aerospace 

Section, Antitrust Division, Department 

of Justice, 450 Fifth Street NW, Suite 

8700, Washington, DC 20530 

(telephone: 202–307–0924). 

Patricia A. Brink, 

Director of Civil Enforcement. 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

United States of America, Department 

of Justice, Antitrust Division, 450 5th 

Street NW, Suite 8700, Washington, DC 

20530, Plaintiff, v. TransDigm Group 

Incorporated, 1301 East 9th Street, Suite 

3000, Cleveland, Ohio 44114, 

Defendant. 

Civil Action No.: 1:17–cv–2735 

Judge: Amy Berman Jackson 

COMPLAINT 

The United States of America, acting 

under the direction of the Attorney 

General of the United States, brings this 

civil antitrust action for equitable relief 

against defendant TransDigm Group 

Incorporated (‘‘TransDigm’’) to remedy 

the harm to competition caused by 

TransDigm’s acquisition of SCHROTH 

Safety Products GmbH and substantially 

all the assets of Takata Protection 

Systems, Inc. from Takata Corporation 

(‘‘Takata’’). The United States alleges as 

follows: 

I. NATURE OF THE ACTION 

1. In February 2017, TransDigm 

acquired SCHROTH Safety Products 

GmbH and substantially all the assets of 

Takata Protection Systems, Inc. 

(collectively, ‘‘SCHROTH’’) from Takata. 

TransDigm’s AmSafe, Inc. (‘‘AmSafe’’) 

subsidiary is the world’s dominant 

supplier of restraint systems used on 

commercial airplanes. Prior to the 

acquisition, SCHROTH was AmSafe’s 

closest competitor and, indeed, its only 

meaningful competitor for certain types 

of restraint systems. 

2. Restraint systems are critical safety 

components on every commercial 

airplane seat that save lives and reduce 

injuries in the event of turbulence, 

collision, or impact. There are a wide 

range of restraint systems used on 

commercial airplanes, including 

traditional two-point lapbelts, threepoint shoulder belts, technical 

restraints, and more advanced 

‘‘inflatable’’ restraint systems such as 

airbags. The airplane type, seat type, 

and seating configuration dictate the 

proper restraint type for each airplane 

seat. 

3. Prior to the acquisition, SCHROTH 

was a growing competitive threat to 

AmSafe. Until 2012, AmSafe, the longstanding industry leader, was nearly 

unrivaled in the markets for restraint 

systems used on commercial airplanes. 

Certification requirements and other 

entry barriers reinforced AmSafe’s 

position as the dominant supplier to the 

industry. However, beginning in 2012, 

after being acquired by Takata, 

SCHROTH embarked on an ambitious 

plan to capture market share from 

AmSafe by competing with AmSafe on 

price and heavily investing in research 

and development of new restraint 

technologies. Over the next five years, 

the increasing competition between 

AmSafe and SCHROTH resulted in 

lower prices for restraint system 

products for commercial airplanes and 

the development of innovative new 

restraint technologies such as inflatable 

restraints. TransDigm’s acquisition of 

SCHROTH removed SCHROTH as an 

independent competitor and eliminated 

the myriad benefits that customers had 

begun to realize from competition in 

this industry. 

4. Accordingly, TransDigm’s 

acquisition of SCHROTH is likely to 

substantially lessen competition in the 

development, manufacture, and sale of 

restraint systems used on commercial 

airplanes worldwide, in violation of 

Section 7 of the Clayton Act, 15 U.S.C. 

18, and should be enjoined. 

II. DEFENDANT AND THE 

TRANSACTION 

5. TransDigm is a Delaware 

corporation headquartered in Cleveland, 

Ohio. TransDigm operates as a holding 

company and owns over 100 

subsidiaries. Through its subsidiaries, 

TransDigm is a leading global designer, 

manufacturer, and supplier of highly 

engineered airplane components. 

TransDigm’s fiscal year 2016 revenues 

were approximately $3.1 billion. 

TransDigm is the ultimate parent 

company of AmSafe, a Delaware 

corporation headquartered in Phoenix, 

Arizona. AmSafe develops, 

manufactures, and sells a wide range of 

restraint systems used on commercial 

airplanes. AmSafe had global revenues 

of approximately $198 million in fiscal 

year 2016. 

6. Takata is a global automotive and 

aerospace parts manufacturer based in 

Japan. Takata was the ultimate parent 

entity of SCHROTH Safety Products 

GmbH, a German limited liability 

corporation base in Arnsberg, Germany, 

and Takata Protection Systems, Inc., a 


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