Business & Finance: Asbestos Merger

Easy money continues to favor mergers and consolidations throughout business in the U. S. One of the latest industries to show this tendency toward the larger unit of management is that concerned with the production of asbestos.* North America produces 85% of the world’s asbestos, the remaining 15% coming from South Africa. Practically all the North American output comes from Canada, where many small companies have hitherto operated. Under the tutelage of Dillon, Read & Co., the industry is being reorganized as a single corporation, capitalized at roughly $50,000,000, and embracing eight constituent companies, chief among which are the Asbestos Corporation of Canada, the Maple Leaf Co. and the Black Lake Asbestos and Chrome Co., Ltd. The first of these above-named concerns produces a third of the Canadian output, or about 28% of the world output.

The driving impulse behind the consolidation is to eliminate the sharp competition which of late years has tended to prevent normal profits in the asbestos industry. It has been particularly necessary for the managers of the new merger to come to agreement with certain prominent Canadian-U. S. firms which will not come into the consolidation and where business volume and size make them an important factor in the business. It is understood that with the “Big Three” of these “independent companies—Johns-Manville, Keasbey & Mattison and Philip Carey & Co.—arrangements have been made to prevent their products interfering with a central leadership and control of theasbestos market aimed at by the new consolidation.

*Asbestos, “the incombustible” (translated from the Greek word for “unquenchable”) is a fibrous mineral substance known technically as chrysotile. Its property of resistance to heat made it a curiosity long ago. Charlemagne was said to have had a tablecloth of it; Eskimos used it for lamp-wicks. Mined from veins in the earth, white or gray horn-blende-asbestos may have fibres five or six feet long, but brittle. Serpentine-asbestos has shorter fibres, yellow or greenish, of great tensile strength and elasticity. Canada (near Quebec) is a great source. The rock is quarried, cobbed by hand, dried, crushed, rolled, divided by “fiberizers,” graded, woven.