Tags: Martin Marietta | Texas Industries | cement | construction

Martin Marietta to Buy Texas Industries for About $2 Billion

Tuesday, 28 Jan 2014 08:45 AM

Martin Marietta Materials Inc. said it would buy Texas Industries Inc. for about $2 billion in stock to strengthen its cement business and increase its presence in high-growth construction markets such as Texas and California.

Texas Industries is the largest producer of cement in Texas and a major producer in California. It shipped 4.4 million tons of finished cement in fiscal year 2013.

Texas shareholders will receive 0.7 Martin Marietta shares for each Texas share held.

The deal values Texas Industries at $71.95 per share, which represents a premium of about 22 percent to its closing price on Dec. 12, when Bloomberg reported that the company was working with Citigroup to find a buyer.

Shares of Texas Industries rose to $73.50 before the bell.

Texas Industries had put itself up for sale as its largest shareholders, Southeastern Asset Management and NNS Holding, sought to exit their stakes.

The two shareholders, who together have about 50 percent stake in Texas Industries, have agreed to vote in favor of the transaction, Martin Marietta said.

"Texas Industries' aggregates operations are strategically located in high-growth markets and fit well into our existing portfolio, and its cement operations will further diversify our product and customer mix," Martin Marietta's Chief Executive Ward Nye said. Nye will lead the combined company.

Martin Marietta produces gravel, sand and other materials used in heavy construction.

Martin Marietta shareholders are expected to own about 69 percent of the combined company and Texas Industries shareholders the rest.

The deal, which is expected to close in the second quarter of 2014, is expected to immediately add to Martin Marietta's earnings per share.

J.P. Morgan, Deutsche Bank and Barclays advised Martin Marietta while Citigroup advised Texas Industries.

Cravath, Swaine & Moore LLP was Martin Marietta's legal adviser while Texas Industries was advised by Wachtell, Lipton, Rosen & Katz.

Texas Industries shares closed at $71.54 on the New York Stock Exchange on Monday. Martin Marietta shares closed at $102.78.

© 2017 Thomson/Reuters. All rights reserved.

 
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Martin Marietta Materials Inc.said it would buy Texas Industries Inc. for about $2 billion in stock to strengthen its cement business and increase its presence in high-growth construction markets such as Texas and California.
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Tuesday, 28 Jan 2014 08:45 AM
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