FTC Blocks Lehigh’s Acquisition of Keystone

The Federal Trade Commission (FTC) is challenging Lehigh Cement’s $151 million acquisition of rival Pennsylvania-based producer Keystone Cement Co., alleging the deal would harm regional competition in the market. 

The commission said that Lehigh, a subsidiary of HeidelbergCement, owns and operates multiple facilities that sell cement in direct competition with Keystone, a subsidiary of Elementia, including two plants located within 40 miles of Keystone’s plant in Bath, Pa. It alleges that the acquisition would reduce the number of significant competitors from four to three in eastern Pennsylvania and western New Jersey market. This would make anticompetitive coordination among the remaining cement suppliers more likely, said the FTC in an administrative complaint

The FTC filed the complaint and authorized a suit in federal court, to enjoin the transaction pending the outcome of the administrative proceedings. 

The complaint also said Keystone’s aggressive pricing has caused Lehigh to lower its cement prices in that market, and to compete on price more vigorously. The acquisition would significantly reduce competition for cement customers, according to the complaint, as the combined firm would be able to unilaterally raise prices or reduce output and quality. 

The administrative trial is scheduled to begin on Nov. 2.

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