HARRISBURG, PA — Pennsylvania and New York have secured an agreement requiring Colas Inc. and Suit-Kote Corporation to divest four asphalt facilities and commit up to $10 million in infrastructure investments to address antitrust concerns over their proposed merger, a transaction regulators warned could increase road maintenance costs for state and local governments.
Pennsylvania Attorney General Dave Sunday’s office filed a federal antitrust complaint and proposed settlement requiring the companies to preserve competition in asphalt emulsions and pavement preservation services. The agreement remains subject to court approval.
The settlement would require the companies to sell a Colas facility in Bloomsburg, Pennsylvania, and three Suit-Kote facilities in Belmont, Buffalo and Jamestown, New York, to a qualified buyer.
The companies also agreed to invest up to $6.5 million in the Bloomsburg facility, including construction of an asphalt emulsion mill, additional storage capacity and pavement preservation equipment.
An additional investment of up to $3.5 million would support pavement preservation equipment at the Belmont facility in New York.
The required divestitures and investments are intended to preserve independent production capacity and competition following the merger.
Colas and Suit-Kote are major suppliers of asphalt emulsions and pavement preservation services in the Northeast. Their customers include the Pennsylvania Department of Transportation, municipalities and commercial purchasers.
Asphalt emulsions, produced using liquid asphalt, water and emulsifying agents, are used in roadway maintenance and preservation.
The companies also provide chip sealing, micro-surfacing, milling and related services designed to maintain pavement conditions.
According to Pennsylvania’s Office of Attorney General, the proposed acquisition would substantially increase market concentration in industries where competition is already limited.
Regulators concluded that the transaction, without corrective measures, would likely result in higher prices, reduced service quality and less favorable purchasing terms for government agencies and other customers.
“This is a very important action taken by my Antitrust Team that will ensure a fair marketplace is maintained for these products and services,” Sunday said.
He said the agreement would protect roadway infrastructure in central and western Pennsylvania while safeguarding public funds used for maintenance.
New York Attorney General Letitia James pursued a corresponding enforcement action.
“No one should be forced to pay unfair prices for safe, well-maintained roads,” James said.
The proposed settlement would allow the acquisition to proceed subject to the divestiture and investment requirements, provided the federal court approves the agreement.
The action places competition safeguards on a merger involving suppliers whose products and services are used in publicly funded roadway maintenance across Pennsylvania and New York.
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