Deal for U.S. fiberboard plants scrapped as DOJ warns of higher prices
By Diane Bartz
WASHINGTON Oct 1 (Reuters) - Flakeboard America Limited, a subsidiary of Chile's Celulosa Arauca y Constitucion , has decided to scrap a deal to buy three plants from fiberboard maker SierraPine, citing regulatory opposition, the companies said on Wednesday.
The Antitrust Division of the U.S. Department of Justice (DOJ) said that the deal for three SierraPine plants would have pushed up prices of medium-density fiberboard, used in furniture and kitchen cabinets, in California, Oregon and Washington.
The deal, which was announced in January, had been valued at $107 million, the companies said at the time. Two of the plants were in Oregon and the third in California.
The department said that Flakeboard and SierraPine were two of four significant suppliers of the fiberboard on the U.S. West Coast.
The deal for the three plants would have given Flakeboard a 58 percent market share for some grades of the fiberboard on the West Coast, the DOJ said. (Reporting by Diane Bartz, editing by G Crosse)
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