This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Texas Industries Deal Nears Early Close

NEW YORK (The Deal) -- There is an outside chance that Martin Marietta Materials' (MLM - Get Report) $2.7 billion acquisition of fellow maker of concrete and building material aggregates Texas Industries  (TXI) could receive antitrust approval as early as March 20.

Martin Marietta said in a Monday filing to the Securities and Exchange Commission that it submitted premerger notification documents with antitrust regulators on Feb. 18. As a result, the waiting period under the Hart-Scott-Rodino Act will expire on March 20 unless the Department of Justice extends its antitrust review.

Representing Martin Marietta in the antitrust review are McDermott Will & Emery partners Raymond Jacobsen, Jon Dubrow and Warren Rosborough and associate Cerissa Cafasso. Texas Industries is represented by Jones Day partner David Wales and associate Ausra Deluard.

The companies, which have overlaps in aggregates and ready-mix cement in Oklahoma and Texas, have said they expect the deal to close in the second quarter. They have acknowledged narrow antitrust concerns, and their merger agreement has contingencies for those markets. Under the agreement, Martin Marietta is not under any obligation to accept DOJ-ordered antitrust divestitures other than one of the quarries located in Mill Creek, Okla., and up to two of the related rail yards located in the Dallas area. It would also have to divest any assets related to the Mill Creek quarry and the Dallas rail yards if those properties are ordered spun off.

The Mill Creek quarry in Johnston County, Okla., might be problematic because Martin Marietta and Texas Industries are the only two crushed stone producers in the county.

Robert Doyle, partner at Doyle, Barlow & Mazard, said the deal is likely to get a second request for information from the DOJ extending the merger review and should close in the second quarter as the companies predict. However, the timing could come earlier if the DOJ's information request is narrow and the companies cooperate with the DOJ's investigation. "If Martin Marietta pushes the DOJ, it could get done rather quickly," he said.

When the deal was announced Jan. 28, Martin Marietta CEO Ward Nye told analysts participating in a conference call that he didn't expect any "material" antitrust issues. "If we thought there was a serious issue there, we wouldn't be doing what we're doing," he said.

Nevertheless, Texas Industries obtained some protection for itself should the deal be terminated on antitrust grounds. Texas Industries would be due a $25 million breakup fee and would be entitled to an option to lease three Martin Marietta distribution yards in Tomball, Robstown and Mont Belvieu, Texas.

Martin Marietta is the second-largest aggregates producer in the U.S., with roughly 300 operating facilities and 12.6 billion tons of reserves. Texas Industries is the leading cement producer in Texas and the third-largest in California. Texas Industries has 0.8 billion tons of aggregates reserves.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
TXI $92.10 -0.28%
MLM $142.33 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%
GOOG $558.40 0.00%

Markets

DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs