Martin Marietta in talks to buy Texas Industries - report

Martin Marietta Materials Inc, the fourth-largest US aggregates producer, is in advanced talks to buy construction material supplier Texas Industries Inc, Bloomberg yesterday reported, citing people familiar with the matter.

An all-stock deal could be announced as early as next week, the report said.

Bloomberg reported last month that Dallas-based Texas Industries had put itself up for sale and was working with Citigroup to find a buyer. Southeastern Asset Management Inc and NNS Holding, the two largest shareholders who control more than 51 per cent of TXI, are said to be looking to sell their stake.

Talks with Martin Marietta resumed late last week after earlier hitting a snag, two sources told Bloomberg. There’s still a chance no agreement will be reached, the people said. The deal could be an all-stock transaction, one person said.

TXI’s performance results have recovered well since the Great Recession thanks to solid cement volumes in Texas and California, a price recovery and limited cost inflation on fuel due to the impact of shale gas on energy prices. The company’s EBITDA more than doubled in 2013 and is forecast to reach US$200m by 2015. Texas Industries’ strength in California and its home state would give Martin Marietta an entry into the cement market amid a US construction rebound, the Bloomberg report highlighted. It does not have aggregates or ready-mix concrete production in California,.

Martin Marietta ranks behind  Vulcan, CRH and HeidelbergCement in terms of US aggregate production.