Martin Marietta Materials Inc.’s proposed hostile takeover of Birmingham-based Vulcan Material’s Co. is now drawing the attention of the federal government. The U.S. Department of Justice is looking into anti-trust implications of the proposed merger.
Vulcan revealed in a filing with the Securities and Exchange that the DOJ has requested information about Vulcan facilities in 15 states, including Alabama. As reported by the Birmingham Business Journal, Vulcan had previously argued that Martin Marietta Materials failed to acknowledge the significant antitrust issues that could stand in the way of the merger.
In our view, the government attention should not come as surprise. The DOJ has recently stepped up its scrutiny of proposed mergers, leaving many businesses wary of large-scale mergers and acquisitions. AT&T abandoned its efforts to buy T-Mobile USA from Deutsche Telekom AG last year after the DOJ filed a lawsuit alleging that the merger would substantially reduce competition.
As we discussed last week, Vulcan is also facing lawsuits from investors regarding the board of director’s decision to reject the proposed merger. Given the recent development, one thing is clear—if Martin Marietta continues to pursue it takeover attempt, both sides are likely to face additional legal obstacles.
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