[Federal Register Volume 66, Number 126 (Friday, June 29, 2001)]
[Notices]
[Pages 34682-34683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-16399]


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FEDERAL TRADE COMMISSION

[File No. 001 0112]


LaFarge S.A., et al.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the complaint that 
accompanies the consent agreement and the terms of the consent order--
embodies in the consent agreement-- that would settle these 
allegations.

DATES: Comments must be received on or before July 18, 2001.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Richard Liebeskind, FTC/S-3105, 600 
Pennsylvania Ave., NW., Washington, DC 20580. (202) 326-2441.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted by the 
Commission, has been placed on the public record for a period of thirty 
(30) days. The following Analysis to Aid Public Comment describes the 
terms of the consent agreement, and the allegations in the complaint. 
An electronic copy of the full text of the consent agreement package 
can be obtained from the FTC Home Page (for June 18, 2001), on the 
World Wide Web, at http://www.ftc.gov/os/2001/06/index.htm. A paper 
copy can be obtained from the FTC Public Reference Room, Room H-130, 
600 Pennsylvania Avenue, NW., Washington, DC 20580, either in person or 
by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania. Ave., NW., 
Washington, DC 20580. Two paper copies of each comment should be filed, 
and should be accompanied, if possible, by a 3\1/2\ inch diskette 
containing an electronic copy of the comment. Such comments or views 
will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Analysis of the Complaint and Proposed Consent Order To Aid Public 
Comment

I. Introduction

    The Federal Trade Commission has accepted for public comment a 
Decision and Order (``Proposed Order''), pursuant to an Agreement 
Containing Consent Orders (``Consent Agreement''), against Lafarge S.A. 
and Blue Circle Industries PLC (collectively ``Respondents''). The 
Proposed Order is intended to resolve anticompetitive effects in the 
cement and lime markets stemming from the proposed acquisition by 
Lafarge of Blue Circle (the ``Acquisition''). As described below, the 
Proposed Order seeks to remedy anticompetitive effects of the 
Acquisition in cement and lime by requiring Respondents to divest 
certain assets relating to cement to Glens Falls Lehigh Cement Company; 
to divest certain other assets relating to cement to an acquirer 
approved by the Commission; and to divest certain assets relating to an 
acquirer approved by the Commission. The Commission has also issued an 
order to Hold Separate and Maintain Assets (``Hold Separate Order'') 
that, except with respect to the assets to be divested to Glens Falls, 
requires Respondents to preserve the businesses they are required to 
divest as viable, competitive, and ongoing operations until the 
divestitures are achieved.
    The Proposed Order, if finally issued by the Commission, would 
settle charges that the Acquisition may have substantially lessened 
competition in the markets for cement and lime. The Commission has 
reason to believe that the Acquisition would violate Section 7 of the 
Clayton Act and Section 5 of the Federal Trade Commission Act. The 
proposed complaint (``Complaint''), described below, relates to the 
basis for this belief.

II. The Merging Parties and the Acquisition

    Lafarge is a French corporation with global operations in the 
manufacture and sale of cement and other building materials. Based on 
2000 production capacity, Lafarge is one of the top three cement 
manufacturers in North America. Lafarge also has an ownership interest 
in a joint venture with Carmeuse North America Group B.V. that 
manufactures and sells lime.
    Blue Circle is an English corporation with global operations in the 
manufacture and sale of cement and other building materials. Based on 
2000 production capacity, Blue Circle is one of the top five cement 
manufacturers in North America. Blue Circle also participates in a 
joint venture with Chemical Lime Company that manufactures and sells 
lime (the ``Lime JV'').
    On January 8, 2001, Lafarge and Blue Circle entered into an 
agreement in which Lafarge will pay Blue Circle shareholders 
approximately $3.8 billion in cash for the approximately 75% of Blue 
Circle's outstanding voting stock that Lafarge does not already own.

III. The Proposed Complaint

    According to the Complaint, the Acquisition will have 
anticompetitive effects in two relevant product markets: cement and 
lime. Cement is a construction raw material that users mix with water 
and aggregates to form concrete. Cement is made by combining calcium 
(normally from limestone), silicon, aluminum, iron and other raw 
materials. Cement manufacturers quarry, crush and grind these raw 
materials, burn them in kilns at high temperatures and then grind the 
resulting pellets with gypsum into a fine powder. Lime is used in a 
variety of applications including, in the steel industry, as a flux to 
remove impurities. Lime is made by quarrying, crushing, and grinding 
limestone and then burning it in kilns at high temperatures.
    The Complaint also alleges three relevant geographic markets in 
which to analyze the effects of the Acquisition: (1) The market for 
cement in the region consisting of the province of Ontario, Canada, all 
of Michigan and the coastal markets around Lake Superior, Lake 
Michigan, Lake Huron, Lake Erie and Lake Ontario, including Green Bay 
and Milwaukee, WI, Chicago, IL, Cleveland, OH and Buffalo, NY (the 
``Great Lakes Region''); (2) the market for cement in the region within 
an approximately 70-mile radius of Syracuse, NY, including the 
metropolitan areas of Syracuse, Utica, Rome, Elmira and Binghamton,

[[Page 34683]]

NY (the ``Syracuse Region''); and (3) the market for lime in the States 
of Alabama, Georgia and Florida (the ``Southeast Region'').
    The Complaint alleges that the markets for cement in the Great 
Lakes Region and the Syracuse Region and the market for lime in the 
Southeast Region are highly concentrated, and the Acquisition, if 
consummated, would substantially increase that concentration. In the 
Great Lakes, Lafarge and Blue Circle have a combined share of 47% of 
the market, and if the Acquisition proceeds, the top four firms would 
control 91% of the market. In the Syracuse Region, Lafarge and Blue 
Circle have a combined market share of 68%, and if the Acquisition 
proceeds, two firms would control 100% of the cement market in the 
Syracuse Region. In the Southeast Region, if the Acquisition proceeds 
and the Lime JV remains in place, Chemical Lime, Blue Circle/Lafarge 
and Carmeuse, through their joint ventures with each other, would link 
together 85% of the lime market and provide the three firms with 
incentives to reduce rivalry in the market.
    The Complaint further alleges that the Acquisition likely would 
eliminate direct competition between Respondents, increase the 
likelihood of coordinated interaction among the remaining firms, and 
result in increased prices for cement and lime. The Complaint also 
alleges that entry into the relevant markets would not be timely, 
likely or sufficient to deter or counteract the adverse competitive 
effects arising from the Acquisition.

IV. Terms of the Proposed Order

    The Proposed Order is designed to remedy the anticompetitive 
effects of the Acquisition through three divestitures. First, Lafarge 
must divest Blue Circle's cement business in the Great Lakes Region 
within 180 days of the consummation of the Acquisition to a Commission-
approved buyer. Second, Lafarge must divest Blue Circle's cement 
terminal that serves the Syracuse Region to Glen Falls no later than 20 
business days after the closing of the Acquisition. Third, Blue Circle 
must regain 100% ownership of the Lime JV from Chemical Lime, and then 
Lafarge must divest Blue Circle's lime business in the Southeast Region 
within 180 days of the consummation of the Acquisition to a Commission-
approved buyer. Lafarge cannot consummate the Acquisition until the 
Lime JV is unwound. If Respondents do not complete the divestitures 
within the time specified in the Proposed Order, procedures for the 
appointment of a trustee to sell the assets have been agreed to and 
will be triggered.
    The Commission has also issued the Hold Separate Order. The purpose 
of the Hold Separate Order is to prevent interim harm to competition 
and to preserve the assets to be divested as viable and competitive 
businesses. The Hold Separate Order requires Respondents to hold Blue 
Circle's cement business in the Great Lakes Region and Blue Circle's 
lime business in the Southeast Region separate from the rest of their 
business operations until Lafarge has divested these assets to a 
Commission-approved buyer. The Hold Separate Order requires Respondents 
to preserve and maintain the marketability, viability and 
competitiveness of the relevant businesses. Respondents have agreed to 
the appointment of trustees to monitor their compliance with the terms 
of the Hold Separate Order.

V. Opportunity for Public Comment

    The Proposed Order has been placed on the public record for 30 days 
for receipt of comments from interested persons. Comments received 
during this period will become part of the public record. After 30 
days, the Commission will again review the Consent Agreement and the 
comments received and will decide whether to make the Proposed Order 
final. By accepting the Consent Agreement subject to final approval, 
the Commission anticipates that the competitive problems alleged in the 
Complaint will be resolved.
    The Commission invites public comment to aid the Commission in 
determining whether it should make final the Proposed Order contained 
in the Consent Agreement. The Commission does not intend this analysis 
to constitute an official interpretation of the Proposed Order, nor 
does this analysis modify in any way the terms of the Proposed Order.

By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 01-16399 Filed 6-28-01; 8:45 am]
BILLING CODE 6750-01-M