Oldcastle Architectural, Inc. parent CRH Plc has withdrawn from a $540 million deal for Dallas-based Pavestone Group LP following an Federal Trade Commission
Oldcastle Architectural, Inc. parent CRH Plc has withdrawn from a $540 million deal for Dallas-based Pavestone Group LP following an Federal Trade Commission challenge that the acquisition would violate antitrust laws by greatly reducing competition for concrete hardscape products sold to [retailers such as] The Home Depot, Lowe’s and Wal-Mart in nearly 300 metropolitan areas. The FTC further alleged the deal’s potential to have similar anticompetitive effects on contractor, dealer and distributor customers in Texas.
We were ready to present at trial evidence that the Oldcastle and Pavestone combination would have led to higher prices and other harmful effects in the sale and manufacture of drycast concrete hardscapes used in walkways, patios, and garden walls, FTC Bureau of Competition Acting Director David Wales noted in a Jan. 15 statement. The parties’ decision to not proceed with the transaction in the face of our challenge is a win for consumers who buy these products for their home-improvement projects.
The proposed transaction, which would have seen the merging of the top two hardscape unit producers in the U.S., was announced in mid-March 2008 with a routine caveat that completion was subject to clearance of U.S. regulatory approvals. Through plant acquisitions and greenfield site development in the mid- to late 1990s, Oldcastle Architectural and Pavestone Group became the leading hardscape unit suppliers to big-box retailers. Stores’ merchandising and distribution capabilities catapulted paving stone and segmental retaining wall unit shipments, helping revive the entire concrete masonry business.
Running 18 plants on 16 sites Û 14 with decorative stone bagging facilities Û Pavestone represented the second major North American deal from which CRH has recently retreated. In late 2007, it ended negotiations for a $3.5 billion-$4.5 billion package of assets Cemex sought to unload following its Rinker Materials takeover earlier in the year.