UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

MONIER LIFETILE LLC, a corporation;
BORAL LTD., a corporation; and
LAFARGE S.A., a corporation.

Docket No. 9290

COMPLAINT


The Federal Trade Commission ("Commission"), having reason to believe that Boral Ltd., a corporation subject to the jurisdiction of the Commission, and Redland PLC, a wholly owned subsidiary of Lafarge S.A., a corporation subject to the jurisdiction of the Commission, acquired shares in and contributed assets to a joint venture limited liability corporation, Monier Lifetile LLC, a corporation subject to the jurisdiction of the Commission, in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C.  18, and Section 5 of the FTC Act, as amended, 15 U.S.C. 45; and it appearing to the Commission that a proceeding in respect thereof would be in the public interest, hereby issues its Complaint, stating its charges as follows:

I. RESPONDENTS

1. Respondent Monier Lifetile LLC is a corporation organized, existing, and doing business under and by virtue of the laws of the state of Delaware, with its principal place of business located at One Park Place, Suite 900, Irvine, California 92614. Monier Lifetile LLC is owned by Lafarge S.A. and Boral Ltd.

2. Respondent Boral Ltd. is a corporation organized, existing, and doing business under and by virtue of the laws of the Country of Australia, with its principal place of business located at 50 Bridge Street, Sydney, NSW, Australia 2000. Boral Ltd., which had total sales of approximately $3.6 billion in 1996, manufactures a diversified group of construction products. Prior to the formation of Monier Lifetile LLC, Boral Ltd. manufactured and sold concrete roofing tile in the United States through its wholly owned subsidiary, Boral Lifetile, Inc. Prior to the formation of Monier Lifetile LLC, Boral Lifetile was the second largest producer of concrete roofing tile in the United States.

3. Respondent Lafarge S.A. is a corporation organized, existing, and doing business under and by virtue of the laws of the Country of France, with its office and principal place of business located at 61 Rue des Belles Feuilles, Paris, France 75016. Lafarge S.A., which had total sales of approximately $7 billion in 1997, produces cement and construction materials. Following the formation of Monier Lifetile LLC, Lafarge S.A. acquired Redland PLC. Prior to the formation of Monier Lifetile LLC, Redland PLC manufactured and sold concrete roofing tile in the United States through its wholly owned subsidiary, Monier, Inc. Prior to the formation of Monier Lifetile LLC, Monier, Inc. was the largest producer of concrete roofing tile in the United States.

II. THE JOINT VENTURE

4. On or about August 15, 1997, Boral Ltd. and Redland PLC acquired stock in and contributed the assets of their respective United States concrete roofing tile operations to a joint venture limited liability corporation, named Monier Lifetile LLC. Monier Lifetile LLC was formed as a limited liability company under Delaware state law.

III. JURISDICTION

5. Monier Lifetile LLC, Boral Ltd. and Lafarge S.A. are, and at all times relevant herein have been, engaged in commerce as "commerce" is defined in Section 1 of the Clayton Act, as amended, 15 U.S.C.  12, and are corporations whose business is in or affects commerce as "commerce" is defined in Section 4 of the Federal Trade Commission Act, as amended, 15 U.S.C.  44.

IV. THE RELEVANT MARKETS

6. The relevant line of commerce in which to analyze the effects of the formation of Monier Lifetile LLC is the market for standard-weight concrete roofing tile. Standard-weight concrete roofing tile is used predominately in new home construction.

7. The relevant geographic markets in which to analyze the effects of the formation of Monier Lifetile LLC are the Southwestern United States (consisting of California, Arizona and Nevada) and Florida and/or narrower areas within the Southwestern United States and Florida including, but not limited to: Southern California (all of the state of California south of, and including, Bakersfield); Nevada; Arizona; and Southern Florida (all of the state of Florida south of Lake Okeechobee).

V. STRUCTURE OF THE MARKETS

8. Prior to the formation of Monier Lifetile LLC, Boral Lifetile, Inc. and Monier, Inc. were the two largest producers of concrete roofing tile in the United States. Only one other manufacturer, Pioneer Roofing Tile, Inc., operates in both the Southwestern United States and Florida. In California and Nevada, the only other significant competitor in concrete roofing tile is Burlingame Industries. In Arizona, Monier Lifetile LLC and Pioneer Roofing Tile, Inc. are the only significant competitors in concrete roofing tile. In Florida, the only other significant producer of concrete roofing tile is Entegra Roof Tile Corp.

9. Each of the relevant markets is highly concentrated whether measured by the Herfindahl-Hirschman Index or the two-firm and four-firm concentration ratios. The formation of Monier Lifetile LLC has greatly increased concentration in each of the already concentrated markets.

VI. ENTRY CONDITIONS

10. The threat of entry has not deterred Boral Lifetile, Inc.'s and Monier, Inc.'s attempts to raise prices for concrete roofing tile in the past. The threat of entry has not deterred anticompetitive effects resulting from the formation of Monier Lifetile LLC. It is unlikely the threat of entry will deter additional anticompetitive effects likely to result from the formation of Monier Lifetile LLC.

11. It is unlikely that an entrant would achieve a significant market impact within two years and deter or counteract the anticompetitive effects likely to result from the formation of Monier Lifetile LLC.

12. Because the cost of entering and producing concrete roofing tile is relatively high compared to the potential sales revenues available to an entrant, new entry into the relevant markets is not likely to be profitable. Consequently, entry into the production of concrete roofing tile is not likely to occur in a timely manner to deter or counteract the anticompetitive effects likely to result from the formation of Monier Lifetile LLC.

VII. EFFECTS OF THE ACQUISITION

13. The formation of Monier Lifetile LLC has substantially lessened, or may substantially lessen, competition in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C.  18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C.  45, in the following ways, among others, by:

a. eliminating Boral Ltd. and Redland PLC as independent competitors with significant capacity in the relevant markets;

b. eliminating actual, direct, and substantial competition between Boral Ltd. and Redland PLC, both of which had the ability and incentive to compete on price, in the relevant markets;

c. increasing the likelihood of coordinated interaction in the relevant markets;

d. increasing the likelihood of unilateral anticompetitive effects in the relevant markets;

e. having led, or leading, to a reduction in likely price decreases or an increase in prices in the relevant markets;

f. having led, or leading, to a reduction in service in the relevant markets; and/or

g. having led, or leading, to a reduction in quality in the relevant markets.

VIII. VIOLATIONS CHARGED

14. The formation of Monier Lifetile LLC described in Paragraph 4 constitutes a violation of Section 7 of the Clayton Act, as amended, 15 U.S.C.  18, and Section 5 of the FTC Act, as amended, 15 U.S.C. 45.

NOTICE

Notice is hereby given to the respondents Boral Ltd., Lafarge S.A., and Monier Lifetile LLC that the twenty first day of October, 1998, at 10:00 o'clock a.m., or such later date as determined by an Administrative Law Judge of the Federal Trade Commission, is hereby fixed as the time and Federal Trade Commission Offices, Sixth Street and Pennsylvania Avenue, Northwest, Washington, D.C. 20580, as the place when and where a hearing will be had before an Administrative Law Judge of the Federal Trade Commission, on the charges set forth in this Complaint, at which time and place you will have the right under said Act to appear and show cause why an order should not be entered requiring you to cease and desist from the violations of law charged in the Complaint.

You are notified that the opportunity is afforded you to file with the Commission an answer to this Complaint on or before the twentieth (20th) day after service of it upon you. An answer in which the allegations of the complaint are contested shall contain a concise statement of the facts constituting each ground of defense; and specific admission, denial, or explanation of each fact alleged in the Complaint or, if you are without knowledge thereof, a statement to that effect. Allegations of the Complaint not thus answered shall be deemed to have been admitted.

If you elect not to contest the allegations of fact set forth in the Complaint, the answer shall consist of a statement that you admit all of the material facts to be true. Such an answer shall constitute a waiver of hearings as to the facts alleged in the Complaint, and together with the Complaint will provide a record basis on which the Administrative Law Judge shall file an initial decision containing appropriate findings and conclusions and an appropriate order disposing of the proceeding. In such answer, you may, however, reserve the right to submit proposed findings and conclusions under  3.46 of the Commission's Rules of Practice for Adjudicative Proceedings and the right to appeal the initial decision to the Commission under 3.52 of said Rules.

Failure to answer within the time above provided shall be deemed to constitute a waiver of your right to appear and contest the allegations of the Complaint and shall authorize the Administrative Law Judge, without further notice to you, to find the facts to be as alleged in the Complaint and to enter an initial decision containing such findings, appropriate conclusions, and order.

NOTICE OF CONTEMPLATED RELIEF

Should the Commission conclude from the record developed in any adjudicative proceedings in this matter that the formation of Monier Lifetile LLC challenged in this proceeding violates Section 7 of the Clayton Act, as amended, or Section 5 of the Federal Trade Commission Act, as amended, the Commission may order such relief against respondents as is supported by the record and is necessary and appropriate, including, but not limited to:

1. Divestiture of an ongoing, operating business, including all assets, tangible and intangible, including but not limited to, all intellectual property, knowhow, trademarks, trade names, research and development, customer contracts, and including all improvements to existing products and new products developed by Monier Lifetile LLC, through divestiture of any/or all the assets utilized by Boral Ltd. and/or Redland PLC for the manufacture and sale of concrete roofing tile in the Southwestern United States and Florida prior to the formation of Monier Lifetile LLC.

2. Construction of and/or the divestiture of a concrete roofing tile manufacturing facility with capacity and capabilities comparable to Boral Ltd.'s Plant in Rialto, California destroyed by fire prior to the formation of Monier Lifetile LLC.

3. Dissolution of the Monier Lifetile LLC joint venture and a distribution of any or all the assets of Monier Lifetile LLC to the party controlling such assets prior to the formation of Monier Lifetile LLC.

4. Such other or additional relief as is necessary to ensure the creation of one or more viable, competitive, independent entities to compete against Monier Lifetile LLC in the manufacture and sale of concrete roofing tile in the Southwestern United States and Florida.

5. A requirement, for a ten (10) year period, that Boral Ltd., Lafarge S.A. and Monier Lifetile LLC provide the Commission with notice in advance of acquiring the assets or securities of, or any other combination with, any person engaged in the manufacture or sale of concrete roofing tile in the Southwestern United States and Florida.

IN WITNESS WHEREOF, the Federal Trade Commission has caused this complaint to be signed by its Secretary and its official seal to be hereto affixed, at Washington, D.C. this twenty-second day of September, 1998.

By the Commission.
SEAL
Donald S. Clark
Secretary