A proposed $350 million deal between CalPortland and Martin Marietta Materials is off as the Federal Trade Commission (FTC) called it “presumptively illegal.”
Last year, Martin Marietta agreed to sell its Tehachapi, Calif., cement plant and related distribution terminals to CalPortland for $350 million in cash. However, an FTC investigation found that the transaction would have eliminated key competition between the companies in the Southern California market, where they are two of only five cement suppliers.
If the transaction was approved, CalPortland would have owned half of all cement plants serving the Southern California market. The FTC said CalPortland would have been well-poised to raise prices unilaterally, and to sustain those price increases. This would have also increased the likelihood for coordinated action between the remaining competitors in the concentrated market.
“The [transaction] abandonment is a victory for consumers and preserves competition for a key component of Southern California’s construction and infrastructure industries,” said FTC’s Bureau of Competition Director Holly Vedova.