616-2771
WWW.USDOJ.GOV
TDD (202) 514-1888
JUSTICE DEPARTMENT ANNOUNCES ITS INTENTION TO BLOCK FORMICA'S
ACQUISITION OF INTERNATIONAL PAPER COMPANY'S HPL BUSINESS
WASHINGTON, D.C. -- The Department of Justice today announced that it
would seek to block Formica Corporation from acquiring the decorative high pressure
laminate (HPL) business of International Paper Company because the transaction
would result in higher prices for HPL.
The Department's Antitrust Division said the proposed acquisition would remove
a key competitor from the approximately $1 billion United States HPL market, and
would substantially increase the opportunity for the two dominant players to coordinate
their prices. The risk of this coordinated interaction is especially pronounced where the
competitors have timely access to pricing announcements and other competitively
sensitive information.
HPLs are used to make durable and impact-resistant decorative surfacing
products, such as kitchen and bath countertops, eating surfaces, doors, lavatory
dividers, desktops and work surfaces.
Currently, only four domestic firms produce HPL. Formica is the leading seller of
HPL worldwide, and the second largest domestic supplier. International Paper is the
third largest seller of HPL in the world, and the number three domestic supplier. "Competition in the high pressure laminate business has resulted in lower prices
and more consumer choice," said Joel I. Klein, Assistant Attorney General in charge of
the Antitrust Division. "Unless this transaction is blocked, those who use high pressure
laminate in products for homes, restaurants, and workplaces -- and ultimately the
homeowners and businesses that purchase the products--will pay higher prices, and
receive fewer services."
Formica, located in Cincinnati, Ohio, manufactures and sells HPL under the
Formica® brand, a trade name that is virtually synonymous with HPL. International
Paper, headquartered in Purchase, New York, is a global paper and forest products
company that manufactures and sells HPL under the Nevamar® and Micarta® trade
names in the United States and the Polyrey® trade name in Europe. In 1997,
International Paper reported United States sales of $12.9 billion.
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