Chancellor Strine Enjoins Martin Marietta’s Attempted Hostile Takeover of Vulcan Materials for Four Months for Breach of Confidentiality Agreements

Update:  On May 31, 2012, the Delaware Supreme Court affirmed the decision of Chancellor Strine in the Martin Marietta Materials, Inc. v. Vulcan Materials Company decision discussed below. The decision was issued from the bench; the Court's order indicates that an opinion will follow in due course.

May 8, 2012

Summary: On May 7, Delaware Chancellor Leo Strine held that Martin Marietta had breached two confidentiality agreements with rival and on-again/off-again merger partner Vulcan Materials and enjoined Martin Marietta’s attempted hostile takeover of Vulcan Materials for four months (the remaining term of the contractual confidentiality obligation).

The 138-page decision contains an unusually detailed analysis of confidentiality provisions by the Court in which many M&A agreements are litigated. Although the focus of Chancellor Strine’s opinion was on confidentiality agreements in the M&A context, his detailed analysis will also be relevant for lawyers in industries (e.g., pharmaceutical, biotech and technology) that frequently utilize confidentiality agreements in licensing, collaboration and technology transfer transactions.