Monier Lifetile LLC will sell production facilities in Arizona, California and Florida to CRH PLC to settle Federal Trade Commission charges that the formation of Monier Lifetile, a joint venture between Boral Ltd. and LaFarge S.A., violated antitrust laws by combining the two largest producers of concrete roofing tile (CRT) in the United States. CRT is the predominant roofing material used in new home construction in the southwest United States and southern Florida.
"Since we filed our complaint, customers have reported that Monier Lifetile has closed plants, reduced production, and raised prices," said William Baer, Director of the FTC's Bureau of Competition. "This confirms the Commission's concern that the combination of these two roofing tile firms put consumers at risk. We believe this divestiture will restore industry competition."
CRH PLC, headquartered in Dublin, Ireland, is an international producer and marketer of construction products and building materials with worldwide sales of approximately $6 billion annually. CRH PLC operates in the United States through its wholly-owned subsidiary, Oldcastle, Inc., headquartered in Atlanta, Georgia, and manufactures CRT in the United States through its Westile division located in Littleton, Colorado.
In an administrative complaint issued in September, the Commission charged that the joint venture could lessen competition, lead to increased prices, and reduce service in the market for CRT.
Monier Lifetile LLC, based in Irvine, California, is owned by LaFarge S.A. and Boral Ltd. Boral, based in Sydney, Australia, was the second largest producer of concrete roofing tile in the United States, prior to the formation of Monier Lifetile LLC. Through its Monier, Inc. subsidiary, Redland PLC was the largest producer of concrete roofing tile in the United States. Since the formation of the joint venture, LaFarge S.A., based in Paris, France, acquired Redland and its interest in Monier Lifetile.
According to the FTC complaint, Boral and Redland formed Monier Lifetile, a limited liability CRT joint venture, in August 1997. At the time, the joint venture was not reportable under the Hart-Scott-Rodino Act (HSR) because it was formed as a limited liability corporation. The Commission and the Department of Justice recently issued a formal interpretation of the HSR rules and, beginning March 1, 1999, the formation of an LLC will be reportable when it combines existing businesses and one of the members of the LLC has an interest of 50 percent or more.
In the areas where CRT roofs are prevalent -- southern California, Nevada, Arizona and southern Florida -- there are very few competitors in the CRT market. The FTC complaint alleges that because of the high cost of entering and producing the tile compared to the low potential sales opportunities, entry into the CRT market by a new competitor is not likely to deter or counteract the likely anticompetitive effects of the joint venture.
The Monier Lifetile facilities that would be sold under the terms of the proposed consent order are located in Casa Grande, Arizona; Corona, California; and Fort Lauderdale, Florida.
An announcement regarding the proposed consent agreement will be published in the Federal Register shortly. The agreement will be subject to public comment for 60 days, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
Copies of the complaint, the proposed consent agreement, and an analysis to aid public comment from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(Docket No. 9290)