Texas Industries Inc. announces decision to spin-off steel business

Pit & Quarry, Feb, 2005

Texas Industries Inc. announced that its board of directors has approved a plan to spin off its wholly owned steel business. The spin-off is expected to take the form of a tax-free stock dividend to TXI shareholders.

"This action will result in the creation of two businesses with leading positions in their respective markets," says Mel Brekhus, CEO of TXI. "TXI's cement, aggregate and concrete operations have strong competitive positions in the Texas and California building materials markets. The steel business, with operations in Texas and Virginia, is the second largest supplier of structural steel throughout North America.

"Both businesses will have strong capital structures. Each will focus on the improvement of returns from current operations and also pursue strategic investment opportunities in their industries.

Tommy Valenta, executive vice president in charge of TXI's steel operations, will be the chief executive officer of the new steel company."

TXI's cement, aggregate and concrete segment and its steel operations are two distinct businesses and the board of directors believes the separation will better facilitate the strategic objectives of both. A separation is expected to permit the companies to more efficiently obtain and allocate resources for distinct businesses and also allow the management of each segment to focus on the opportunities and challenges specific to their particular business.

Details of the spin-off have not been finalized. The transaction is subject to the following: confirmation that the distribution will be tax-free, continued favorable market conditions, satisfaction of U.S. Securities and Exchange Commission requirements and other customary conditions. It is expected that the distribution will be completed summer 2005.