Martin Marietta Materials Inc. announced that it has entered into a definitive agreement to sell its South Texas cement business and certain related concrete operations to CRH Americas Materials Inc., a subsidiary of CRH plc, for $2.1 billion in cash.
More specifically, the facilities to be divested include the Hunter cement plant in New Braunfels, related cement distribution terminals and 20 concrete plants serving the Austin and San Antonio region.
Ward Nye, chairman, president and CEO of Martin Marietta, stated,“ Consistent with our SOAR (Strategic Operating Analysis and Review) 2025 objectives, we continually examine ways to optimize our portfolio and product mix through asset purchases, exchanges and/or divestitures. After thorough evaluation, we believe that monetizing these operations is in the company’s best interests to maximize near-, medium- and long-term stakeholder value.
“Consistent with our clearly articulated capital allocation priorities, we expect to use the transaction proceeds to advance our SOAR 2025 growth objectives, while continuing our long-standing track record of returning capital to shareholders.”
The transaction is expected to close in the first half of 2024, subject to regulatory approvals and other customary closing conditions.
“This is yet another transaction that has been undertaken by the multi-nationals, in the same vein as the Vulcan purchase of U.S. Concrete, the Martin Marietta purchase of Heidelberg’s western assets, the Summit purchase of certain Argos assets, and so many more large transactions that have taken place in the last few years,” said Pierre Villere of Allen-Villere, the premier mergers and acquisition advisors-and-valuation-services firm to the construction materials industry. “These moves are all in the name of portfolio optimization, or maximizing returns for the shareholders by re-balancing assets and assuring the best possible efficiencies. We can expect to see more of this merger and acquisition activity, as every major, publicly-held player in construction strives to grow shareholder value.”