Justice Blocks Alcoa Acquisition

The U.S. Justice Department sued to block Aluminum Co. of America’s proposed purchase of an Alabama aluminum rolling mill from rival Reynolds Metals Co.

In a lawsuit filed in a federal court in Alabama, the Justice Department charged the $250 million purchase would mean higher prices for aluminum used to make cans and, ultimately, consumers who buy canned beverages.

“This is a classic case of a highly concentrated industry becoming even more concentrated,” said Joel Klein, the Justice Department’s top antitrust enforcer.

The Justice Department charged that Alcoa has no need for additional aluminum production capacity and that the company planned to shut down the Alabama plant after buying it.