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Martin Marietta Materials and Texas Industries to merge

Ward Nye

US$2.7 billion transaction creates a market-leading supplier of aggregates and heavy building materials

MARTIN Marietta Materials’ and Texas Industries’ boards of directors have unanimously approved a definitive merger agreement under which Martin Marietta will acquire all of the outstanding shares of Texas Industries common stock in a tax-free, stock-for-stock transaction.

The transaction reflects an enterprise value of approximately US$2.7 billion, including the assumption of US$0.7 billion of Texas Industries’ debt. Upon completion, Martin Marietta and Texas Industries shareholders are expected to own approximately 69% and 31% of the combined company respectively.


Based on the closing market prices for the shares of both companies on 27 January 2014, and their debt levels as of their most recently completed quarters, the combined company will have an enterprise value of approximately US$8.5 billion and will be a market-leading supplier of aggregates and heavy building materials.

With a network of more than 400 quarries, mines, distribution yards and plants spanning 36 US states, Canada, the Bahamas and the Caribbean islands, the combined company will seek to grow faster and more efficiently than either Martin Marietta or Texas Industries could on a standalone basis.

Ward Nye (pictured), Martin Marietta’s president and chief executive officer said: ‘By uniting Martin Marietta’s and Texas Industries’ complementary assets and leveraging an expanded geographic footprint, we will be even better positioned to deliver value to our shareholders and customers.

'Texas Industries’ aggregates operations are strategically located in high-growth markets and fit well into our existing portfolio, and their cement operations will further diversify our product and customer mix.

‘As a result of this combination, we will be poised to capitalize on the strength of our combined aggregates platform as well as the significant upside potential in the infrastructure, residential and non-residential construction segments. We are confident that combining our companies will accelerate our ability to increase sales and cash flow, and improve margins.’

Mel Brekhus, Texas Industries’ president and chief executive officer, added: ‘Combining with Martin Marietta represents a unique opportunity to create a more competitive company with a solid, diversified portfolio of assets, enhanced credit profile and a strong balance sheet.

‘This combination will advance our growth objectives, deliver significant value to all of our stakeholders, and allow shareholders to participate in the combined company’s potential growth and value creation.’

The transaction, which is subject to both regulatory and shareholder approval and customary closing conditions, is expected to close in the second quarter of 2014.

After the close, the combined company - which will operate under the name Martin Marietta Materials Inc - will be headquartered in Raleigh, North Carolina, and will maintain a significant presence in Dallas. Ward Nye and the Martin Marietta executive team will lead the combined company.


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