Vulcan Materials Shares Surged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of construction materials maker Vulcan Materials (NYS: VMC) erupted today, jumping as much as 34.1% amid crushingly heavy trading.

So what: Rival Martin Marietta Materials (NYS: MLM) just posted a $4.7 billion hostile takeover offer for Vulcan. The companies discussed a merger last year, but nothing came of it, so now we have the smaller company running the show with a stock-swap bid for the larger one.

Now what: Martin Marietta's shares also gained nearly 5% today as investors saw value in the proposed deal. Since it's a stock-for-stock transaction, Vulcan's market cap is now larger than the bid would indicate. Combining these all-American materials specialists would unlock economies of scale. Vulcan investors who were disappointed by the recent dividend cut should welcome this offer with open arms.

Interested in more info about Vulcan Materials? Click here to add it to My Watchlist.

At the time this article was published

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