Jeld-Wen Inc. signaled the end of a years-long legal battle this week, by revealing in the statements for its latest earnings report that the company will forgo any further appeal of a court order requiring divesture of one of its plants. In June 2016, San Antonio-based door maker Steves and Sons (Steves) filed a lawsuit against the company, alleging that Jeld-Wen violated U.S. antitrust laws when it merged with a competitor, CraftMaster Manufacturing Inc. (CMI), acquiring a Towanda, Pa.-based doorskin plant. A trial-by-jury process ruled that Jeld-Wen’s acquisition of CMI violated antitrust provisions, after which a U.S. Court of Appeals upheld an order for Jeld-Wen to sell the plant. An appeal by Jeld-Wen resulted in a unanimous decision by a three-judge panel upholding the decision. After a request for a rehearing by the judge, officials for Jeld-Wen signaled that the company would petition to a higher court. The company doubled back on its plan this week, announcing it will commence a process for divestiture.

“Divestiture is the remedy that will restore competition in the door manufacturing industry. Today, we will take a well-deserved victory lap, and tomorrow we’ll get back to work, providing doors to our customers,” said Steves’ CEO, Edward Steves, in response to the announcement.

In its recent statement, officials for Jeld-Wen say they continue to believe “that the litigation lacks merit and denies that the company engaged in any wrongdoing.” However, after a thorough review, “Jeld-Wen has concluded at this time that it is in the best interest of the company and its stakeholders to commence a process for the divestiture of its Towanda, Pa., operations and certain related assets,” a company statement added. “The special master has retained an investment bank to evaluate divestiture options for the Towanda facility and oversee an orderly sale process. Although the company will not be seeking Supreme Court review of the Fourth Circuit’s decision, the company retains the legal right to challenge the divestiture process and the final divestiture order.”

In a statement issued by the company, officials for Steves pointed out that the case represents “the first time an antitrust lawsuit brought by one company against another – rather than by the U.S. government – has resulted in a divestiture and complete legal victory.” By order of the court, the company’s long-term supply agreement with Jeld-Wen will continue through the divestiture process, officials said, after which the acquiring company must negotiate a fair agreement with Steves, extending supply through September 10, 2024.

“We and our customers can operate in the confidence that Steves can deliver on orders as we always have,” said Sam Bell Steves II, president. “Today is a red-letter day which reaffirms our faith in the basic fairness in the law and we look forward to restoration of real competition and choice in our industry.”

According to Jeld-Wen, for the year ended December 31, 2020, operations in Towanda generated approximately $205 million of total gross sales, of which approximately $150 million was generated from third party customers.

“Jeld-Wen is excited to continue to provide industry-leading products and services to our customers and is well-prepared to support the continued growth of our customers post-divestiture,” said Jeld-Wen president and CEO Gary Michel.

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