The Department of Justice and the State of Tennessee have taken action to block a proposed acquisition that they contend would significantly reduce competition in the market for hot-mix asphalt in Shelby County, Tennessee. Filed in the United States District Court for the Western District of Tennessee, the complaint names CRH PLC, its subsidiary APAC-Tennessee Inc., and Standard Construction Group Inc. The core of the matter centers on APAC's plan to acquire Standard for at least $133.9 million, an acquisition that the plaintiffs argue violates Section 7 of the Clayton Act, 15 U.S.C. 18.
The Parties Involved
CRH PLC, an Irish corporation with global operations, is a leading producer of construction materials. Through its extensive network of subsidiaries, including APAC-Tennessee, CRH is a major player in the supply of aggregates, asphalt, and ready-mix concrete across 44 states. In 2025, CRH reported global sales of approximately $37.4 billion.
APAC-Tennessee Inc., a Delaware corporation headquartered in Atlanta, Georgia, is a wholly owned subsidiary of CRH. APAC operates as a regional construction company serving Memphis, western Tennessee, and northern Mississippi. It is one of the largest suppliers of construction materials and services in the south-central United States.
Standard Construction Group Inc., a Tennessee corporation based in Cordova, Tennessee, operates four hot-mix asphalt plants and six sand and gravel plants. In 2024, Standard reported sales of approximately $81 million.
Both APAC and Standard are significant competitors in the manufacture and sale of hot-mix asphalt used for road construction in Shelby County. The State of Tennessee, through its Attorney General's Office, joined the federal government in this antitrust enforcement action, highlighting the importance of competitive markets for public infrastructure projects.
The Product and Geographic Market
The central product in this antitrust dispute is hot-mix asphalt, a composite material vital for building and maintaining roads, parking lots, and airport tarmacs. It is composed of aggregates, binder, and filler. Its unique performance characteristics, such as durability and friction, make it the preferred material for roadways, with alternatives like ready-mix concrete being significantly more expensive and slower to set for road paving. Ready-mix concrete cannot be used for repairing asphalt roads.
A critical distinction is drawn for "TDOT-approved hot-mix asphalt." The Tennessee Department of Transportation (TDOT) sets stringent specifications to ensure the safety and longevity of state roads. Hot-mix asphalt that does not meet these specifications is unsuitable for TDOT projects, effectively creating a specialized and distinct product market. A small price increase for TDOT-approved hot-mix asphalt would not lead customers to substitute other materials or non-compliant asphalt, rendering this a relevant product market under antitrust law.
The relevant geographic market is identified as Shelby County, Tennessee. The localized nature of the hot-mix asphalt market is due to two primary factors: temperature and transportation costs. Hot-mix asphalt must maintain a specific temperature range until it is poured. As it travels from the plant, its temperature drops, limiting the distance a plant can effectively serve. Additionally, hot-mix asphalt is heavy and expensive to transport, meaning that plants located closer to a job site have a significant cost advantage. These factors mean that suppliers outside Shelby County would not provide a sufficient competitive alternative in response to a price increase within the county.
Anticompetitive Concerns and Market Impact
Currently, three major suppliers compete for TDOT-approved hot-mix asphalt projects in Shelby County. APAC and Standard are two of these three. Their direct head-to-head competition benefits consumers, including the State of Tennessee, which spends hundreds of millions of dollars annually on road construction and maintenance. The proposed acquisition would reduce the number of significant competitors from three to two. This reduction in competitive intensity would likely lead to substantially higher prices for hot-mix asphalt, ultimately burdening taxpayers who fund state and federal road projects.
The complaint alleges that the acquisition would give APAC control over the supply of hot-mix asphalt necessary for various road construction projects, eliminating crucial competition. APAC currently owns two of the seven TDOT-approved hot-mix asphalt plants in Shelby County, while Standard owns three. The combined entity would control five of the seven plants, leaving only one other competitor with two plants. This significant concentration would allow the combined firm to exert greater market power, driving up costs and potentially reducing the quality of essential infrastructure materials.
Proposed Resolution
To address these serious anticompetitive concerns, the Department of Justice and the State of Tennessee have filed a proposed Final Judgment alongside their complaint. This judgment requires the divestiture of specific assets to restore competition. Specifically, APAC must divest its facility located at 4765 Tuggle Road, Memphis, TN 38113, and Standard must divest its facility at 7666 Raleigh Millington Road, Millington, TN 38053. These divestitures aim to ensure that a viable third competitor remains in the market, thereby preserving competitive conditions for the supply of hot-mix asphalt in Shelby County, Tennessee. The public has been invited to comment on the proposed Final Judgment, with a 60-day window for submissions. Comments will be posted publicly and filed with the Court, reflecting the transparency inherent in the Antitrust Procedures and Penalties Act.
