Martin Marietta Materials has agreed to acquire Texas Industries in an all-stock deal worth more than $2 billion, the companies announced on Tuesday morning.
In the deal, Martin Marietta will exchange seven-tenths of one of its shares, worth $71.95, for each Texas Industries share.
Martin Marietta is a big producer of sand and gravel, and acquiring Texas Industries, a construction supplies company, will expand its range of offerings and deepen its presence in the fast growing Texas market.
“We like the Texas market a lot,†Martin Marietta’s chief executive, C. Howard Nye, said in an interview. “This augments the position we have in Dallas, Fort Worth. And the Texas market for the long term is one of the most dynamic in the country.â€
The two companies began merger talks last year but could not agree on a deal. Talks restarted recently and proceeded over the weekend, with final details coming together on Monday.
Mr. Nye said his company had been looking at Texas Industries since 2010, when it reviewed its strategic plan.
Shares of Martin Marietta, which has a market value of about $4.9 billion, were up 4.4 percent on Tuesday, regaining ground lost in the days leading up to the finalization of the deal.
The acquisition will benefit the company in two ways, Mr. Nye said, protecting Martin Marietta’s balance sheet and reducing its tax bill.
The deal will be significant for the two shareholders that control more than 50 percent of Texas Industries’ stock. Southeastern Asset Management, the money manager that opposed the Dell buyout, owns about 28 percent of the shares, and NNS, a group controlled by the Egyptian billionaire Nassef Sawiris, owns 23 percent. Both Southeastern and NNS have previously owned Martin Marietta shares, and Mr. Nye said this fact helped smooth the deal.
Acquiring Texas Industries will allow Martin Marietta to move past its failed bid for a rival, Vulcan Materials, two years ago. That deal led to a messy legal dispute, but Martin Marietta shares have risen steadily since then.
“We had a lot of conviction about the Vulcan transaction or we wouldn’t have gone ahead with it,†Mr. Nye said. “But this was one of the options we were considering. When you’re going through a strategic planning process, it’s not necessarily about one company.â€
JPMorgan Chase, Deutsche Bank and Barclays advised Martin Marietta Materials, while Cravath, Swaine & Moore provided legal advice. Citigroup advised Texas Industries, and Wachtell, Lipton, Rosen & Katz provided legal advice.
