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The American Lawyer


Cravath, Wachtell Lead on Martin Marietta's $2.7 Billion Cement Buy

By Tom Huddleston Jr.

Two years after the collapse of its attempted takeover of rival Vulcan Materials, Martin Marietta Materials said Tuesday it will pay $2.7 billion to acquire Dallas-based cement-maker Texas Industries.

Terms of the all-stock deal call for Martin Marietta to exchange 0.7 of its own shares for each share of Texas Industries, the Lone Star State's largest cement producer and a major player in California's cement market.

Based on Martin Marietta's Monday closing price, the transaction values Texas Industries at $71.95 per share. Should the deal close as expected in the year's second quarter—pending the approval of regulators and both companies' shareholders—Martin Marietta shareholders would own roughly 69 percent of the combined company and Texas Industries shareholders would own the balance.

Already the country's second-largest producer of construction aggregates—a category that includes materials such as crushed stone, sand and gravel—Raleigh-based Martin Marietta expects the Texas Industries acquisition to help it compete with industry leader Vulcan. Martin Marietta's $5.1 billion hostile bid to acquire Vulcan in 2011 led to a drawn-out legal battle between the two companies that wound up in Delaware Chancery Court, where the attempted takeover died the following year.

The Texas Industries purchase is also likely to help Martin Marietta expand its presence in California and Texas, where most of the target company's cement plants are located.

Cravath, Swaine & Moore is advising Martin Marietta on the deal with an all-New York team that includes M&A partners Scott Barshay and George Schoen; executive compensation and benefits partner Eric Hilfers; tax partner Andrew Needham; environmental law partner Matthew Morreale; environmental law senior attorney Annmarie Terraciano and real estate practice area attorney Joyce Law. Associates are Jacquelyn Arcati, Andrew Elkin, Jarrett Hoffman and Kara Mungovan. Also working on the deal are Debra Aboodi, Sara Lykken and Julia Onorato—Cravath associates who have not yet been admitted to the bar.

Roselyn Bar is Martin Marietta's general counsel.

Davis Polk & Wardwell is representing J.P. Morgan Securities, Barclays Capital and Deutsche Bank Securities in their roles as financial advisers to Martin Marietta on the acquisition. Davis Polk's team includes corporate partner Phillip Mills and associates Boyoon Choi and Brian Wolfe. All are in New York.

Texas Industries, meanwhile, has hired a firm with experience dealing with Martin Marietta: Wachtell, Lipton, Rosen & Katz. Wachtell is now serving as Texas Industries' lead outside counsel on the sale with a team led by corporate partner Mark Gordon. Corporate partners Gordon Moodie and Daniel Neff are also advising, as are tax partner T. Eiko Stange, executive compensation and benefits partner Adam Shapiro and antitrust partner Nelson Fitts. Wachtell associates on the deal are S. Iliana Ongun, Richard Ross, Michael Sabbah and Michael Schobel. All are in New York.

Frederick Anderson serves as the top in-house attorney for Texas Industries.

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