Genstar Limited

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IN THE MATTER OF GENSTAR LIMITED MODIFYING ORDER IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT AND SEC. 7 OF THE CLAYTON ACT July, 1984 Docket No. C-3049. Consent Order, Nov. 10, 1980-Modifying Order, s Order issued an Nov.This order reopens the proceeding and modifies the Commission 1980 (96 F. C. 795) to permit respondent to both ship cement from its Tilbury Island Plant in British Columbia to California, Oregon, Washington and Nevada and acquire cement distribution terminals in those four states without prior Commission approval.

ORDER MODIFYING DECISION AND ORDER Genstar Limited has requested that the Commission modify its Order in Docket No. C-3049 (1 to relieve Genstar of its obligation under Paragraph II of the Order to obtain, until January 31, 1990 Commission approval to ship cement it produces outside the United States to cement facilities it owns in the four-state area of Washington, Oregon, Nevada, and California ("four-state area ), and (2) to relieve Genstar of its obligation under Paragraph VII(B) to obtain until January 31, 1985, Commission approval before acquiring active cement terminals in the four-state area. After duly considering Genstar s petition, the Commission has determined that Genstar has demonstrated changed circumstances of fact that warrant reopening of the Order, and that the Order should be modified in the manner that Genstar requests.

Before 1980, when Genstar acquired the Flintkote Company, Genstar had no cement plants in the relevant market and did not sell directly to end.users; Genstar, however, supplied cement to cement producers in the market. Genstar s proposed acquisition of Flintkote the third largest competitor in the area, presented several alleged anticompetitive possibilities.

The Commission and Genstar agreed to a cease and desist Order against Genstar that allowed the proposed acquisition to take place, but that contained provisions designed to eliminate the possible anticompetitive effects of the acquisition. Paragraphs II and II, in conjunction with the cement terminal moratorium provision contained in Paragraph VII(B), were designed to avoid the possibility that Genstar would dominate the market through the combination of its status as a major supplier and its ownership of Flintkote. Paragraph II restricts Genstar s abilty to import cement into the relevant area for GENSTAR LTD.

264 Modifying Order its own use, and Paragraph III requires Genstar until December 31 1984, to make available to producers in the market excess cement produced by the Canadian plant from which Genstar supplies cement to the relevant area. The provision in Paragraph VIIB) that restricts Genstar s ability to acquire active cement terminals in the relevant market was an adjunct to Paragraphs II and III. When the Commission accepted the consent Order, it recognized that the Order s import restrictions would limit Genstar s abilty to compete to its fullest in the relevant market; however, the provisions were believed to be necessary during the period of short supply that then prevailed, to eliminate the opportunity for Genstar to effect an anticompetitive supply squeeze. Due to increased capacity in the relevant market, such an event no longer is a realistic possibility. Consequently, there no longer is any reason to restrict Genstar from competing fully in the market. This changed circumstance offact and the public interest therefore require modification of the Order. Accordingly, It is ordered That the proceeding be, and it hereby is, reopened. It is ordered That the Order be, and it hereby is, modified by (1) deleting Paragraph II of the Order, and (2) substituting for Paragraph VII(B) of the Order the following:

VII.

It is further ordered That prior to January 31, 1985 Genstar shall cease and desist from acquiring, directly or indirectly, without the prior approval of the Federal Trade Commission, the whole or any part of:

B. any Product manufacturing plant located in any Cement Market Area.

Commissioner Calvani dissented.

n:DERAL TRADE COMMISSION DECISIONS Set Aside Order 104 F.