Martin Marietta Materials, Inc. (NYSE: MLM) today announced that
it has entered into an agreement (the “Timing Agreement”) with the
U.S. Department of Justice (“DOJ”) with respect to the timing of
steps to be taken in connection with the DOJ’s review of Martin
Marietta’s proposed combination with Vulcan Materials Company
(NYSE: VMC).
The Timing Agreement provides that, in the second half of April
2012, Martin Marietta and the DOJ investigating staff will discuss
resolution of any antitrust concerns in an effort to reach
agreement on a consent order. If agreement with the DOJ on a
consent order is not reached on that timeline, the Timing Agreement
provides that Martin Marietta will not seek to close the
transaction prior to mid-August without the consent of the DOJ.
Ward Nye, Martin Marietta President and Chief Executive Officer,
said, “Our Timing Agreement with the DOJ is an important
development. It underscores our stated expectation that the HSR
review process relating to our proposed combination with Vulcan can
be concluded on a timely basis. We continue to work cooperatively
with the DOJ and, while there are no guarantees, we remain
confident that we will be able to reach a successful conclusion of
this process.
“As we said when we made our offer public, we do not believe
there are any significant regulatory hurdles to completing this
transaction. With this Timing Agreement in place, we believe that
both sets of shareholders will be best served by Vulcan and Martin
Marietta commencing active, good faith negotiations with a view
toward reaching mutual agreement on a compelling transaction. Delay
and non-engagement represent only significant risks to both
companies' shareholders. We are ready and willing to meet with
Vulcan and their advisors immediately to accomplish this
objective,” Mr. Nye concluded.
As previously announced, on December 12, 2011, Martin Marietta
commenced an exchange offer in which each outstanding share of
Vulcan will be exchanged for 0.50 of a Martin Marietta share. The
offer represents a premium for Vulcan shareholders of 15% to the
average exchange ratio based on the closing share prices for Vulcan
and Martin Marietta during the 10-day period ended December 9, 2011
and 18% to the average exchange ratio based on the closing share
prices for Vulcan and Martin Marietta during the 30-day period
ended December 9, 2011. Martin Marietta also intends to maintain
the dividend for the combined company at Martin Marietta's current
rate of $1.60 per Martin Marietta share annually, or the equivalent
of $0.80 per Vulcan share annually, based on the proposed exchange
ratio. This dividend rate is 20 times Vulcan's current level. More
information about the offer is available at
www.aggregatesleader.com. There is no assurance that a settlement
agreement with the DOJ will be reached or, if an agreement is
reached, as to the timing or terms of such agreement.
Cautionary Note Regarding
Forward-Looking Statements
This press release may include "forward-looking statements."
Statements that include words such as "anticipate," "expect,"
"should be," "believe," "will," and other words of similar meaning
in connection with future events or future operating or financial
performance are often used to identify forward-looking statements.
All statements in this press release, other than those relating to
historical information or current conditions, are forward-looking
statements. These forward-looking statements are subject to a
number of risks and uncertainties, many of which are beyond Martin
Marietta's control, which could cause actual results to differ
materially from such statements. Risks and uncertainties relating
to the proposed transaction with Vulcan include, but are not
limited to: Vulcan's willingness to accept Martin Marietta's
proposal and enter into a definitive transaction agreement
reasonably satisfactory to the parties; Martin Marietta's ability
to obtain shareholder, antitrust and other approvals on the
proposed terms and schedule; uncertainty as to the actual premium
that will be realized by Vulcan shareholders in connection with the
proposed transaction; uncertainty of the expected financial
performance of the combined company following completion of the
proposed transaction; Martin Marietta's ability to achieve the
cost-savings and synergies contemplated by the proposed transaction
within the expected time frame; Martin Marietta's ability to
promptly and effectively integrate the businesses of Vulcan and
Martin Marietta; the combined company's ability to pay dividends in
the amounts anticipated; a downgrade of the credit rating of
Vulcan's indebtedness, which could give rise to an obligation to
redeem Vulcan's existing indebtedness; the potential implications
of alternative transaction structures with respect to Vulcan,
Martin Marietta and/or the combined company, including potentially
requiring an offer to repurchase certain of Martin Marietta's
existing debt; the implications of the proposed transaction on
certain of Martin Marietta's and Vulcan's employee benefit plans;
and disruption from the proposed transaction making it more
difficult to maintain relationships with customers, employees or
suppliers. Additional risks and uncertainties include, but are not
limited to: the performance of the United States economy; decline
in aggregates pricing; the inability of the U.S. Congress to pass a
successor federal highway bill; the discontinuance of the federal
gasoline tax or other revenue related to infrastructure
construction; the level and timing of federal and state
transportation funding, including federal stimulus projects; the
ability of states and/or other entities to finance approved
projects either with tax revenues or alternative financing
structures; levels of construction spending in the markets that
Martin Marietta and Vulcan serve; a decline in the commercial
component of the nonresidential construction market, notably office
and retail space; a slowdown in residential construction recovery;
unfavorable weather conditions, particularly Atlantic Ocean
hurricane activity, the late start to spring or the early onset of
winter and the impact of a drought or excessive rainfall in the
markets served by Martin Marietta and Vulcan; the volatility of
fuel costs, particularly diesel fuel, and the impact on the cost of
other consumables, namely steel, explosives, tires and conveyor
belts; continued increases in the cost of other repair and supply
parts; transportation availability, notably barge availability on
the Mississippi River system and the availability of railcars and
locomotive power to move trains to supply Martin Marietta's and
Vulcan's long haul distribution markets; increased transportation
costs, including increases from higher passed-through energy and
other costs to comply with tightening regulations as well as higher
volumes of rail and water shipments; availability and cost of
construction equipment in the United States; weakening in the steel
industry markets served by Martin Marietta's dolomitic lime
products; inflation and its effect on both production and interest
costs; Martin Marietta's ability to successfully integrate
acquisitions and business combinations quickly and in a
cost-effective manner and achieve anticipated profitability to
maintain compliance with Martin Marietta's leverage ratio debt
covenants; changes in tax laws, the interpretation of such laws
and/or administrative practices that would increase Martin
Marietta's and/or Vulcan's tax rate; violation of Martin Marietta's
debt covenant if price and/or volumes return to previous levels of
instability; a potential downgrade in the rating of Martin
Marietta's or Vulcan's indebtedness; downward pressure on Martin
Marietta's or Vulcan's common stock price and its impact on
goodwill impairment evaluations; the highly competitive nature of
the construction materials industry; the impact of future
regulatory or legislative actions; the outcome of pending legal
proceedings; healthcare costs; the amount of long-term debt and
interest expense; changes in interest rates; volatility in pension
plan asset values which may require cash contributions to pension
plans; the impact of environmental clean-up costs and liabilities
relating to previously divested businesses; the ability to secure
and permit aggregates reserves in strategically located areas;
exposure to residential construction markets; and the impact on the
combined company (after giving effect to the proposed transaction
with Vulcan) of any of the foregoing risks, as well as other risk
factors listed from time to time in Martin Marietta's and Vulcan's
filings with the SEC.
The foregoing review of important factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included elsewhere, including
the Risk Factors section of the Registration Statement and our most
recent reports on Form 10-K and Form 10-Q, and any other documents
of Martin Marietta and Vulcan filed with the SEC. Any
forward-looking statements made in this press release are qualified
in their entirety by these cautionary statements, and there can be
no assurance that the actual results or developments anticipated by
us will be realized or, even if substantially realized, that they
will have the expected consequences to, or effects on, us or our
business or operations. Except to the extent required by applicable
law, we undertake no obligation to update publicly or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
Important Additional
Information
This press release relates to the Exchange Offer by Martin
Marietta to exchange each issued and outstanding share of common
stock of Vulcan for 0.50 shares of Martin Marietta common stock.
This press release is for informational purposes only and does not
constitute an offer to exchange, or a solicitation of an offer to
exchange, shares of Vulcan common stock, nor is it a substitute for
the Tender Offer Statement on Schedule TO or the preliminary
prospectus/offer to exchange included in the Registration Statement
on Form S-4 (the "Registration Statement") (including the letter of
transmittal and related documents and as amended and supplemented
from time to time, the "Exchange Offer Documents") initially filed
by Martin Marietta on December 12, 2011 with the SEC. The
Registration Statement has not yet become effective. The Exchange
Offer will be made only through the Exchange Offer Documents.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE EXCHANGE OFFER
DOCUMENTS AND ALL OTHER RELEVANT DOCUMENTS THAT MARTIN MARIETTA HAS
FILED OR MAY FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE
THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION.
In connection with the solicitation of proxies for Vulcan's 2012
annual meeting of shareholders, Martin Marietta filed a preliminary
proxy statement on January 24, 2012 (as amended, the "Vulcan
Meeting Preliminary Proxy Statement") with the SEC and intends to
file a definitive proxy statement in connection therewith (the
"Vulcan Meeting Definitive Proxy Statement"). When completed, the
Vulcan Meeting Definitive Proxy Statement and accompanying proxy
card will be mailed to the shareholders of Vulcan. Martin Marietta
also intends to file a proxy statement on Schedule 14A and other
relevant documents with the SEC in connection with its solicitation
of proxies for a meeting of Martin Marietta shareholders (the
"Martin Marietta Meeting") to approve, among other things, the
issuance of shares of Martin Marietta common stock pursuant to the
Exchange Offer (the "Martin Marietta Meeting Proxy Statement").
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE VULCAN MEETING
PRELIMINARY PROXY STATEMENT, THE VULCAN MEETING DEFINITIVE PROXY
STATEMENT, THE MARTIN MARIETTA MEETING PROXY STATEMENT AND OTHER
RELEVANT MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION.
All documents referred to above, if filed, will be available
free of charge at the SEC's website (www.sec.gov) or by directing a
request to Morrow & Co., LLC at (877) 757-5404 (banks and
brokers may call (800) 662-5200).
Martin Marietta, its directors and executive officers and the
individuals nominated by Martin Marietta for election to Vulcan's
Board of Directors are participants in any solicitation of proxies
from Vulcan shareholders for the Vulcan Meeting or any adjournment
or postponement thereof. Martin Marietta, its directors and
executive officers are participants in any solicitation of proxies
from Martin Marietta shareholders for the Martin Marietta Meeting
or any adjournment or postponement thereof. Information about the
participants, including a description of their direct and indirect
interests, by security holdings or otherwise, is available in the
Registration Statement, the proxy statement for Martin Marietta's
2011 annual meeting of shareholders, filed with the SEC on April 8,
2011, and the Vulcan Meeting Preliminary Proxy Statement, or will
be available in the Vulcan Meeting Definitive Proxy Statement or
the Martin Marietta Meeting Proxy Statement, as applicable.
About Martin Marietta
Martin Marietta Materials, Inc. is the nation's second largest
producer of construction aggregates and a producer of
magnesia-based chemicals and dolomitic lime. For more information
about Martin Marietta Materials, Inc., refer to the Corporation's
website at www.martinmarietta.com.
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