Justice Department Requires Divestitures in Neenah Enterprises Inc.’s Acquisition of US Foundry
Divestitures Will Preserve Competition for Essential Construction Products Sold to Towns and Municipalities
The Department of Justice announced today that it will require Neenah Enterprises Inc. (NEI), U.S. Holdings Inc. (U.S. Holdings), and U.S. Foundry and Manufacturing Corporation (US Foundry) to divest certain gray iron municipal castings assets in order to proceed with NEI’s proposed acquisition of substantially all of the assets of US Foundry. NEI and US Foundry are two of only three significant suppliers of gray iron municipal castings in eleven eastern and southern states. Gray iron municipal castings are customized molded iron products such as manhole covers and frames used to access subterranean areas and grates and drains used to direct water in roadway, parking, and industrial areas.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit today 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 competitive harm alleged in the lawsuit.
“NEI and US Foundry provide castings that are essential to public works and construction projects in towns and municipalities throughout the United States,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “The transaction, as originally proposed, would have led to higher prices, lower quality, and slower delivery times for essential pieces of infrastructure. Today’s settlement will ensure that towns and municipalities across the country will continue to benefit from competition for these critical products.”
Under the terms of the proposed settlement, the parties must divest all rights, titles, and interests in over 500 gray iron municipal casting patterns to D&L Foundry Inc. (D&L Foundry), or an alternate acquirer approved by the United States. D&L Foundry is an established provider of gray iron municipal castings in the United States, but with sales primarily outside the states where NEI and US Foundry compete. With the divested patterns, D&L, or an alternate qualified acquirer, will be able to expand into the states where NEI and US Foundry had competed.
NEI, a corporation headquartered in Neenah, Wisconsin, produces gray and ductile iron castings for the industrial and municipal sectors. NEI operates two foundries in Neenah, Wisconsin, and Lincoln, Nebraska.
US Foundry is a wholly-owned subsidiary of U.S. Holdings, a corporation headquartered in Hialeah, Florida. US Foundry produces gray iron municipal castings at its foundry located in Medley, Florida.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Jay Owen, Acting Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the final judgment upon finding it is in the public interest.
The claims resolved by the settlement are allegations only and there has been no determination of liability.