CRH Americas closed a $3.5 billion acquisition of Ash Grove Cement Co. late last month days after announcing a settlement to resolve Federal Trade Commission charges that the deal violated antitrust law. Terms called for the Oldcastle Inc. parent company to sell a Three Forks, Mont., cement plant and quarry to GCC Americas; three Omaha, Neb., area sand & gravel sites to Martin Marietta Materials; plus, three quarries and two asphalt plants near Kansas City to Summit Materials. The settlement also contains two three-year provisions: It grants GCC an option to use two Three Forks-fed CRH terminals in Alberta; and, holds that CRH, at GCC’s option, will purchase cement from the mill for distribution in Canada.
|A Louisville, Neb., mill with 945,000 tons’ capacity is one of seven cement operations joining CRH Americas in the Ash Grove deal.|
FTC proposed the asset sales concurrent with a complaint, filed in U.S. District Court, alleging a harmful effect on competition for portland cement and aggregates in four states. The proposed acquisition would reduce the number of significant competitors in metro areas, regulators contend, increasing the likelihood that the merged company would unilaterally exercise market power—leading to agencies and consumers paying higher prices for materials. CRH Americas and Ash Grove Cement own Montana’s two sole portland cement plants, for example, and their subsidiaries are leading sand & gravel and crushed stone producers, respectively, in the Omaha/Council Bluffs, Iowa, and Johnson County, Kan., markets. As suitors of the FTC-pinpointed cement, aggregate and asphalt operations, GCC, Martin Marietta and Summit Materials have what the agency calls “the experience and capability to replace one of the merging parties as a significant competitor in the relevant markets.”
CRH Americas and Overland Park, Kan.-based Ash Grove announced an agreement for the tie up in September 2017, subject to approval of the latter company’s shareholders. Outlining the rationale for the offer and agreement, officials noted that CRH Americas—through the Oldcastle Architectural, Materials and Precast businesses—are Ash Grove’s largest customer. The deal elevates CRH Americas to a major North American cement producer, with upwards of 10 million tons’ capacity between 10 plants in the U.S. and Canada. Dublin-based parent CRH Plc established a significant foothold in portland cement production three years ago, acquiring the Holcim (Canada) business amid the Lafarge Group and Holcim Ltd. merger.
CRH, GCC COMPLETE CEMENT AND READY MIXED DEALS
CRH Americas and Grupo Cementos de Chihuahua, S.A.B. de C.V., parent of GCC America, have closed transactions coinciding with the former producer’s acquisition of Ash Grove Cement Co. and abiding a U.S. Federal Trade Commission settlement. CRH Americas has sold GCC the 350,000-tpy Trident cement plant in Three Forks, Mont., per settlement terms. In a companion deal independent of the FTC agreement, CRH Americas has acquired much of GCC America’s Oklahoma and northwest Arkansas ready mixed concrete production and fleet assets. GCC will maintain and operate four ready mixed plants in the Fort Smith, Ark., area, and lease a Tulsa, Okla., office building to CRH Americas. The cement and ready mixed deals were valued at $107.5 million and $118.5 million, respectively.