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FOR IMMEDIATE RELEASE
Friday, June 22, 2018

Justice Department Requires CRH to Divest Rocky Gap Quarry in Order to Proceed With Pounding Mill Acquisition

Divestiture Will Preserve Competition in the Supply of Aggregate and Asphalt Concrete in Southern West Virginia

The Department of Justice announced today that it will require CRH plc and CRH Americas Materials, Inc. to divest an aggregate quarry in Rocky Gap, Virginia, in order to proceed with its proposed acquisition of Pounding Mill Quarry Corporation.    

The Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed transaction.  At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the Department’s competitive concerns.

“Today’s structural settlement resolves both horizontal and vertical competition concerns and ensures that purchasers of aggregate and asphalt concrete in southern West Virginia — and ultimately, taxpayers — will continue to benefit from competition in the supply of these critical products used in road construction and maintenance,” said Assistant Attorney General Makan Delrahim of the Antitrust Division.  “As a result of the proposed acquisition, CRH would have owned nearly all of the aggregate quarries that supply southern West Virginia.”

According to the Department’s complaint, both CRH and Pounding Mill produce and sell aggregate. CRH also produces and sells asphalt concrete.  Aggregate is an essential input in asphalt concrete.  Aggregate and asphalt concrete are the primary materials used to build, pave, and repair roads. 

The complaint alleges that, for a significant number of customers in southern West Virginia, CRH and Pounding Mill are two of only three competitive sources of aggregate qualified by the West Virginia Department of Transportation.  According to the complaint, the loss of horizontal, head-to-head competition between CRH and Pounding Mill would likely result in higher prices for aggregate customers in that area.  

The complaint also alleges that the acquisition would raise vertical competition concerns.  Only one company, a recent entrant, competes with CRH to supply asphalt concrete in southern West Virginia.  That company relies on Pounding Mill to supply the aggregate it needs to manufacture asphalt concrete.  According to the complaint, if CRH were to acquire its rival’s source of aggregate, it would have the incentive and ability to disadvantage its rival by withholding this essential input or supplying it on less favorable terms, resulting in higher prices for the sale of asphalt concrete in southern West Virginia.  

Under the terms of the proposed settlement, CRH must divest the Pounding Mill quarry in Rocky Gap, Virginia and related assets to an acquirer approved by the United States.  This structural divestiture remedies the competitive harm resulting from the elimination of a significant aggregate competitor and provides an alternative source of aggregate for CRH’s only asphalt concrete competitor.  

The settlement also includes, consistent with other antitrust settlements in this administration, several provisions designed to improve the effectiveness of the decree and the Division’s future ability to enforce it. 

CRH plc is headquartered in Ireland and is a global supplier of building materials.  In the United States, CRH, through its vast network of subsidiaries, is a leader in the supply of aggregate, asphalt concrete, and ready mix concrete, among numerous other things, conducting business in 44 states.  In 2015, CRH had global sales of approximately $26 billion, with sales in the United States of approximately $14 billion.  

CRH Americas Materials, Inc. is incorporated in Delaware with its principal place of business in Atlanta, Georgia.  CRH Americas Materials, Inc. is an indirect subsidiary of CRH Americas, Inc.  CRH Americas Materials, Inc. is one of the largest suppliers of aggregate, asphalt concrete, ready mix concrete, and construction and paving services in the United States.  

Pounding Mill is a Delaware corporation headquartered in Bluefield, Virginia.  Pounding Mill owns and operates four quarries — three in Virginia and one in West Virginia — from which it supplies aggregate.  In 2015, Pounding Mill had sales of approximately $44 million.  

As required by the Tunney Act, the proposed settlement, along with the Department’s competitive impact statement, will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Maribeth Petrizzi, Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530.  At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

Updated June 22, 2018