“Construction adhesives are essential products used daily on jobsites,” the commission said in announcing the lawsuit, adding that the proposed transaction would consolidate what it describes as the two most significant competitors in the U.S. market for professional-grade construction adhesives.

The agency seeks a court order to prevent the transaction from closing while its administrative challenge proceeds.

“Antitrust laws protect Americans from anticompetitive mergers that threaten to drive up the costs of the products we use to build and maintain our homes,” said Daniel Guarnera, director of the commission's Bureau of Competition, in describing the action to block the proposed Loctite–Liquid Nails combination.

RELATED

US Construction Materials Prices Rise 3.5% as Contractor Backlog Declines

Broader Market Volatility Signals Caution

The action comes as construction materials prices have remained elevated through 2025, complicating bid assumptions and escalation planning for contractors preparing 2026 work.

U.S. Bureau of Labor Statistics data show the Producer Price Index for construction materials and components was up about 2.8% in September compared with one year earlier, indicating that wholesale construction inputs continue to rise even as pandemic-era supply disruptions have moderated. 

September is the most recent month for which fully published index data are available, as the protracted federal government shutdown halted data collection for more than 40 days.

Henkel, based in Düsseldorf, markets Loctite as a premium adhesives brand sold through building-materials distributors and major retailers. Liquid Nails is widely used in framing, finish carpentry and general construction applications.

The commission alleges the two brands compete most directly for professional users, limiting the ability of smaller manufacturers or private-label alternatives to constrain pricing. The agency did not disclose specific market-share figures but said its analysis was based on competitive effects, customer substitution and pricing behavior.

American Industrial Partners acquired Liquid Nails in 2023 as part of its purchase of PPG’s former U.S. and Canadian architectural coatings business, now operating as Pittsburgh Paints. In business press reporting following the commission legal filing, the seller disputed the agency’s market definition, arguing the construction adhesives sector remains competitive and includes a range of alternative products. Henkel declined to comment on the lawsuit when contacted by multiple outlets, including ENR.

Why This Matters

ENR’s third-quarter 2025 Cost Report found construction input prices remain elevated, reinforcing contractor concerns over materials costs, escalation risk and bidding assumptions entering 2026.

While the trade commission legal challenge focuses on construction adhesives, it arrives amid uneven pricing behavior across construction input categories. Commodity materials such as lumber and steel have seen fluctuations and price drops in 2025. 

In contrast, many specialty construction products—including chemical-based adhesives, sealants and coatings—have not experienced similar long-term price declines and remain higher than last year.

Economists and federal regulators have said that pattern is more common in markets characterized by strong brand differentiation, fewer effective substitutes and higher switching costs for professional users. 

In competition reports and merger challenges issued since 2021, the commission and the U.S. Justice Dept. have said higher concentration in differentiated manufacturing markets can weaken pricing discipline and reduce incentives for innovation.

A relevant comparison is FTC v. Staples, Inc., a landmark antitrust case in which the commission successfully argued that eliminating direct competition between close rivals could lead to measurable price increases even in markets with other sellers. 

In that case, economic analysis showed prices were lower in markets where business supply companies Staples and Office Depot competed head-to-head, and the court accepted evidence that a merger would likely raise prices by roughly 5% to 10%. 

The Henkel suit reflects similar reasoning, arguing that Loctite and Liquid Nails constrain each other’s pricing for professional users in ways that smaller brands or private-label alternatives may not.

Industry data also point to a longer-term shift in market structure. The U.S. Census Bureau’s most recent Economic Census, released in 2024 and covering 2022 production patterns, shows a decline in the number of mid-sized manufacturers across several building-products subsectors compared with earlier census cycles—indicating continued consolidation.

For contractors and estimators, these dynamics translate into an incremental, persistent bid risk. Adhesives and similar specialty materials typically account for a small, single-digit share of total materials costs on most large-scale projects, but they are used across nearly all trades. 

Even modest year-over-year increases aggregated across large volumes can impact margin assumptions, especially on labor-intensive scopes of work.

Consolidation can also reduce distributors’ negotiating leverage on rebates, promotions and inventory flexibility that contractors rely on when locking in material costs. Large contractors are not insulated from these dynamics. 

Pricing behavior and allocation decisions in construction material markets are often set in the mid-market, where volumes are high but buyer leverage is limited and contracts are renewed more frequently. 

When consolidation reduces competition at that level, resulting pricing and supply signals tend to propagate upward, shaping distributor economics and national account frameworks that ultimately affect large, long-duration projects.

Although the commission legal challenge does not predetermine future pricing outcomes, its timing—amid elevated wholesale input prices, delayed federal data releases and continued consolidation—underscores a growing regulatory focus on how the materials-market structure may influence long-term costs, availability and risk allocation for construction firms.