Martin Marietta Materials Inc.’s $2.7 billion purchase of Texas Industries Inc. was approved by the U.S. Justice Department under a settlement that requires asset sales.
Martin Marietta will sell rail yards in Texas and an Oklahoma quarry to maintain competition in the market for gravel, sand and crushed stone, the Justice Department’s antitrust division said in court filings today in Washington.
“Without the divestiture obtained by the antitrust division, customers would have likely faced higher prices as a result of this acquisition,” Bill Baer, the division’s head, said in a statement.
Martin Marietta, based in Raleigh, North Carolina, gains entry into the cement market with the Texas Industries purchase as construction bounces back. U.S. housing starts topped 1 million on an annual basis in April and May after plummeting as low as 478,000 in April 2009. Martin Marietta’s products, known as aggregates, are mixed with cement to produce concrete.
Texas Industries, based in Dallas, is the largest cement producer in Texas with two cement plants there and third-biggest in California, with a plant near Los Angeles. Texas consumes the most cement and aggregates in the U.S. and California is second.
Before the settlement, Martin Marietta’s aggregate shipments were set to rise to 43 million tons, surpassing Vulcan Marterials Co. as the largest producer of sand, gravel and crushed rock. Martin Marietta’s sales from Texas were expected to double to 34 percent.
Martin Marietta fell 0.9 percent to $129.78 at 12:15 p.m. in New York trading.
The case is U.S. v. Martin Marietta Materials Inc., 14-cv-01079, U.S. District Court, District of Columbia (Washington).