Vulcan Materials Company, the largest producer of construction aggregates in the US, has confirmed that Raleigh, North Carolina-based Martin Marietta Materials has made an unsolicited offer for the company.
Birmingham, Alabama-based Vulcan said it would “carefully review the proposal and determine the course of action that it believes is in the best interests of the company and its shareholders”.
Vulcan Materials is the nation's largest producer of construction aggregates, a major producer of asphalt mix and concrete and a leading producer of cement in Florida.
Martin Marietta is the second largest producer of construction aggregates in the US. The company’s Aggregates Business network of more than 285 quarries, distribution yards and plants spans 27 states, Canada, the Bahamas and the Caribbean.
Ward Nye, Martin Marietta's president and chief executive officer, said: "The combination of Martin Marietta and Vulcan is a compelling opportunity for both companies' shareholders, customers, employees and the communities we serve. By bringing together our highly complementary assets, we have the opportunity to create the global leader in aggregates, led by the best team in the industry, drawn from both companies.
“The combined company will have one of the industry's strongest balance sheets and, as we achieve expected synergies of $200 to $250 million and continue to adhere to Martin Marietta's strict operational and financial discipline, the company will be well positioned to pursue a wide range of attractive growth opportunities and to continue delivering value to shareholders.”
Martin Marietta said that under the terms of its proposal, the combined company would be headquartered in Raleigh and maintain a major presence in Birmingham.
As of December 9, 2011, the combined market capitalization of the two companies was $7.7 billion and the combined total enterprise value was $11.4 billion. The combined mineral reserves of the two companies would be 28 billion tons.
Vulcan said it would advise shareholders of its recommendation regarding the exchange offer within 10 business days.
