U.S. to Fight Merger of Asphalt Makers

The Justice Department said Thursday that it will challenge the 19-month-old merger of two big Southland asphalt makers, claiming that their marriage reduces competition in the Southern California market for the paving material.

A department spokesman said the agency will file a civil antitrust suit “in a day or two” in U.S. District Court in Los Angeles that will attempt to force the merged company to shed unspecified assets in the Los Angeles area and western San Diego County.

The department also will seek to bar the asphalt-making partners who formed the joint venture from buying into any similar companies for 10 years without department or court approval.

The merger of Industrial Asphalt and Huntmix, two of the top three asphalt-concrete producers in Southern California, violates the Clayton and Sherman antitrust acts by threatening to “substantially lessen competition” in the business, the department contended in a statement. Both companies are based in Van Nuys.

But Robert Hunt, a managing director of Industrial Asphalt, said the two companies obtained Justice Department approval for the merger before it occurred. Department officials refused to discuss the case.

Both sides agree that the merged company is a major producer of asphalt concrete, which is used for paving streets and driveways. The product is made by mixing rock, sand and gravel with the byproducts of oil refining.

Industrial Asphalt would disclose no figures, but competitors said it leads the industry. The Justice Department said that, even before the Dec. 20, 1983, merger, Industrial was the biggest manufacturer of asphalt in the state. Huntmix was described as the third-biggest producer in greater Los Angeles.