Martin Marietta Materials Inc. and Vulcan Materials Company are the two largest providers, in the United States,

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Martin Marietta Materials Inc. and Vulcan Materials Company are the two largest providers, in the United States, of rock-mining and similar materials for infrastructure. In the mid-2000s, Vulcan approached Martin on several occasions to offer a “strategic transaction,” which Martin turned down on all occasions for entrenchment reasons. When the chief operating officer of Martin became the chief executive officer, he was more willing to consider the transaction, which involved a merger between the two companies. The new CEO, however, was cautious of any transaction that might put his new position in peril and was even more wary after a failed hostile takeover attempt of his company earlier in the year. Therefore, Martin insisted on confidentiality agreements to prevent any public disclosure of the merger. A nondisclosure agreement and a joint-defense agreement were signed between the two companies. The agreements prohibited both companies from disclosing any material from the merger other than “evaluating a transaction,” and a transaction was defined as a “possible business transaction between Martin and Vulcan.” The NDA permitted disclosure if required in connection with “legal proceedings, subpoena, civil investigative demand or other similar process.” There was also a clause that required each company to let the other comment on any material that was to be released before the release occurred. Later on, the merger broke down due to undesirable market conditions on behalf of Vulcan. Martin launched a hostile exchange offer and a proxy contest to unseat four directors from the Vulcan board of directors. Did this act by Martin violate the proposed merger by the two companies?

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Dynamic Business Law

ISBN: 9781260247893

5th Edition

Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs

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