USA OK's $2.7 Billion Martin Marietta Merger
WASHINGTON (CN) - Martin Marietta can sell an aggregate quarry in Oklahoma and two rail yards in Texas for federal approval of its $2.7 billion acquisition of Texas Industries, which will create the largest aggregate producer in the United States.
The United States and Texas filed a settled antitrust complaint against the companies on June 26. Their merger, announced on Jan. 28, "would create the largest aggregate producer in the United States, with annual net sales of nearly $3 billion," according to the settled complaint.
"The proposed acquisition would eliminate real and potential head-to-head competition between Martin Marietta and Texas Industries on price and service in supplying aggregate in the Dallas, Texas area," the complaint states. "For a significant number of customers in the Dallas area, Martin Marietta and Texas Industries are two of the three best sources of Texas DOT-qualified aggregate. Elimination of competition between Martin Marietta and Texas Industries likely would give Martin Marietta the ability to raise prices or decrease the quality of service provided to these customers. As a result, the proposed acquisition likely would substantially lessen competition in the production and sale of aggregate in the Dallas area, in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18."
Under the Proposed Final Judgment , also filed on June 26, Martin Marietta will divest itself of the three properties.
Aggregate rock is a key component of highway building, used as underlay to asphalt.