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In response to the announcement that cement producer CalPortland Company has terminated its proposed $350 million acquisition of assets from a rival cement producer in Southern California, Martin Marietta Materials, Inc., the FTC’s Bureau of Competition Director Holly Vedova issued the following statement:

“Following an in-depth investigation by FTC staff of the Mergers I Division and Bureau of Economics along with the California Attorney General’s Office, CalPortland and Martin Marietta announced today that they have abandoned their planned transaction. The transaction would have reduced the number of cement suppliers in Southern California from five to four, further concentrating an already concentrated market, and was presumptively illegal. The abandonment is a victory for consumers and preserves competition for a key component of Southern California’s construction and infrastructure industries.

“I want to extend my heartfelt appreciation to the FTC team for their outstanding work on this matter and their close collaboration with their counterparts at the California Attorney General’s Office,” Vedova said.

Cement is an essential ingredient of concrete, a fundamental and irreplaceable construction material used to build schools, hospitals, houses of worship, residential and commercial buildings, as well as highways, bridges, tunnels, mass transit systems, airports, sidewalks, dams, reservoirs, drinking and wastewater pipes, and many other pieces of critical public infrastructure.

CalPortland and its parent company, Japan’s Taiheiyo Cement Corporation, had proposed to acquire a competing cement plant just fourteen miles away in Tehachapi, California, as well as a distribution terminal and other assets from Martin Marietta.

The FTC’s investigation found that the transaction would have eliminated key competition between the parties in the Southern California market, where the parties compete head-to-head to supply cement and are two of only five suppliers. If the transaction had consummated, CalPortland, already a leading supplier, would have owned half of all cement plants serving the Southern California market. CalPortland would have been well-poised to raise prices unilaterally, and to sustain those price increases, the investigation found. The transaction would have also increased the likelihood for coordinated action between the remaining competitors in this concentrated market.

The Federal Trade Commission works to promote competition, and protect and educate consumers.  The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. You can learn more about how competition benefits consumers or file an antitrust complaint.  For the latest news and resources, follow the FTC on social mediasubscribe to press releases and read our blog.

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