Attorney General James Protects Access to Affordable Road Repair Services in Western and Central New York
NEW YORK – New York Attorney General Letitia James today ensured that towns and counties in Western and Central New York will continue to have fair options for critical road repair services. An investigation by the Office of the Attorney General (OAG), the Pennsylvania Office of the Attorney General, and the U.S. Department of Justice (DOJ) found that a proposed merger of Colas Inc. (Colas) and Suit-Kote Corporation (Suit-Kote) would have unfairly reduced competition for road maintenance services, leaving many local governments with just one company to turn to when they need to conduct repairs to keep their roads safe. After DOJ terminated its review, which would have allowed the merger to proceed unconditionally, Attorney General James and Pennsylvania Attorney General Dave Sunday continued their investigations. As a result, Colas must sell one of its facilities in Pennsylvania and three former Suit-Kote facilities in New York to a qualified buyer to maintain competition.
“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.”
“This action will protect critical roadway infrastructure in central and western Pennsylvania, and for our neighbors to the north, and preserve the government funds that pay for it,” said Pennsylvania Attorney General Dave Sunday. “Antitrust work is essential as it ensures transactions between companies do not harm families, local economies, and consumers.”
Colas and Suit-Kote are asphalt companies that both provide road repair services in New York and Pennsylvania. In New York, the majority of road mileage is comprised of county and local roads, which are maintained by county and local governments. Because county and municipal highway departments rarely have the specialized crews and equipment needed to perform the necessary road repairs, they often rely on “turnkey” service providers like Colas and Suit-Kote who both supply the asphalt and apply it to repair the roads.
The OAG’s investigation found that for several counties in Western and Central New York – including Cattaraugus, Chautauqua, Erie, Genesee, Livingston, Monroe, Niagara, Orleans, and Wayne, and the municipalities included in their county’s contracts – Colas and Suit-Kote were often the only two regular bidders for turnkey road repair services. The proposed merger under Colas threatened to eliminate this competition, giving Colas the power to demand higher prices and eliminating its incentive to invest in higher quality services and innovation.
Under the settlement, Colas will be required to sell several of its locations to a single, competitive buyer. Colas must sell Suit-Kote’s regional headquarters in Jamestown, its manufacturing and storage facilities in Buffalo and Belmont, and a Colas facility in Bloomsburg, Pennsylvania. The buyer will also have the option to purchase additional equipment from Colas, such as vehicles for transporting and applying asphalt. The locations Colas is required to sell include facilities that are strategically located to serve customers throughout Western and Central New York, with easy access to key suppliers and ample capacity to produce millions of gallons of asphalt emulsions each year. As a result, local and county governments in areas affected by the merger will continue to have competing options for road maintenance services.
This matter was handled for New York by Assistant Attorney General Benjamin Cole, under the supervision of Deputy Bureau Chief Amy McFarlane and Bureau Chief Elinor Hoffmann, all of the Antitrust Bureau. The Antitrust Bureau is a part of the Division for Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Meghan Faux.
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