New York Construction Report staff writer
Colas Inc. must sell four asphalt production and storage facilities in New York and Pennsylvania to preserve competition in road maintenance services following a proposed merger with Suit-Kote Corp., New York Attorney General Letitia James announced this week. Click to see the report.
“No one should be forced to pay unfair prices for safe, well-maintained roads,” said Attorney General James. “Protecting competition in this industry will ensure New Yorkers’ tax dollars are spent fairly and asphalt companies will continue to provide high-quality services to our towns and counties.”
The settlement follows an investigation by the New York and Pennsylvania attorneys general and the U.S. Department of Justice that found the merger threatened to reduce competition for road repair contracts in western and central New York and parts of Pennsylvania.
Under the agreement, Colas must sell Suit-Kote’s regional headquarters in Jamestown, N.Y., along with its manufacturing and storage facilities in Buffalo and Belmont, N.Y., and a Colas facility in Bloomsburg, Pa., to a single qualified buyer.
The buyer will also have the option to purchase additional equipment from Colas, including vehicles used to transport and apply asphalt.
The facilities are strategically located to serve customers throughout western and central New York and have access to key suppliers and the capacity to produce millions of gallons of asphalt emulsions annually.
The investigation found that Colas and Suit-Kote were often the only two regular bidders for turnkey road repair services in several western and central New York counties, including Cattaraugus, Chautauqua, Erie, Genesee, Livingston, Monroe, Niagara, Orleans and Wayne.
Local and county governments in those areas often rely on turnkey contractors that supply asphalt and apply it to roads because municipal and county highway departments generally lack the specialized crews and equipment needed to carry out the work.
The proposed merger threatened to eliminate competition between the two companies, potentially allowing Colas to charge higher prices and reducing incentives to improve service quality and develop new approaches to road maintenance, the investigation found.
The U.S. Department of Justice terminated its review of the proposed merger without imposing conditions, allowing the transaction to proceed. New York Attorney General Letitia James and Pennsylvania Attorney General Dave Sunday continued their investigations, resulting in the settlement requiring the facility sales.
“No one should be forced to pay unfair prices for safe, well-maintained roads,” James said. “Protecting competition in this industry will ensure New Yorkers’ tax dollars are spent fairly and asphalt companies will continue to provide high-quality services to our towns and counties.”
The settlement is intended to maintain competing options for local governments procuring road maintenance services and protect public funds used to repair and maintain roads.
