DOJ Requires Martin Marietta Divestitures For Texas Industries Acquisition

(RTTNews) - The U.S. Justice Department said Thursday that it will require Martin Marietta Materials Inc. (MLM) to divest one Oklahoma quarry and two Texas rail yards in order to proceed with its proposed $2.7 billion acquisition of Texas Industries Inc. (TXI).

The department's Antitrust Division and the state of Texas filed a civil antitrust lawsuit Thursday in the U.S. District Court for the District of Columbia to block the proposed deal. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the department's competitive concerns alleged in the lawsuit.

Under the terms of the proposed consent decree, Martin Marietta must divest its North Troy aggregate quarry in Mill Creek, Oklahoma, its rail yard in Dallas, and its rail yard in Frisco, Texas. Under the proposed settlement, the department's Antitrust Division must approve the buyer of the divested assets.

"Today's proposed settlement will help ensure that aggregate purchasers in parts of the Dallas metropolitan area will continue to receive the benefits of vigorous competition," said Bill Baer, Assistant Attorney General in charge of the department's Antitrust Division. "Without the divestiture obtained by the Antitrust Division, customers would have likely faced higher prices as a result of this acquisition."

In January, construction materials producer Martin Marietta Materials agreed to buy smaller peer Texas Industries in an all stock deal valued at about $2.7 billion, including the assumption of $0.7 billion of Texas Industries' debt. The deal, which has the unanimous approval of the boards of both companies, is expected to be closed in the second quarter of 2014.

Martin Marietta shares closed Thursday's regular trading session at $130.13, down 80 cents, while Texas Industries shares closed the day at $91.16, down 53 cents.