Martin Marietta Materials notified Vulcan Materials on Dec. 12 that it is offering $4.6 billion in a hostile bid to acquire Vulcan.
Both are large players in aggregate production in the U.S. Both companies also have ready-mixed concrete operations. Vulcan Materials, based in Birmingham, Ala., is No. 7 in the 2011 TCP 100; Raleigh, N.C.-based Martin Marietta is No. 9.
"The combination of Martin Marietta and Vulcan is a compelling opportunity to both companies' shareholders, customers, employees, and the communities we serve," said Ward Nye, Martin Marietta's president and CEO.
Vulcan's board of directors is reviewing the offer and will advise its shareholder of its recommendation within 10 days.
In their press release, Martin Marietta said both companies discussed a "business combination" one and a half years ago. Vulcan did not wish to move ahead.
"Recent events, including the fragile state of the U.S. economy, the lack of visibility as to when a substantial recover will take place, and the uncertainty surrounding government spending on infrastructure projects, only strengthens the rationale behind a combination," Nye said in a letter to Vulcan. Combining the companies would save at least $200 million in annual costs, Martin Marietta said.
Vulcan bought Florida Rock Industries in 2007, just as the Florida construction market started to suffer and before the deep recession struck the U.S.
"While boosting our presence in high-growth markets, enhancing our aggregates reserves, and bolting on to our existing operations, this major acquisition (Florida Rock) also raised our exposure to suddenly devastated markets, with Florida being the worst," Vulcan Chairman and CEO Donald James said in the company's 2010 Annual Report.