Boral Joins Forces With US Giant

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Thursday, October 17th, 2013
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In a bid to create what it says will be a world leading plasterboard and ceilings business across three continents, Australian construction materials giant Boral has joined forces with a major building materials company in the United States.

In a bid to create what it says will be a world leading plasterboard and ceilings business across three continents, Australian construction materials giant Boral has joined forces with a major building materials company in the United States.

In a statement, Boral announced it had reached an agreement with US building materials manufacturer USG Corporation under which the Australian building materials giant will fold its Gypsum division including its plasterboard operations in Australia and Asia into a $US1.6 billion joint venture together with USG’s Asia and Middle Eastern businesses targeting markets throughout Australasia, Asia and the Middle East.

Reflecting Boral’s greater contribution of assets of the JV relative to its partner, USG will pay the Australian company $US500 million in cash upon the deal’s completion and an extra $US25 million and $US50 million after three and five years respectively if earning targets are achieved.

Four Multi Deck Weighbridges For Boral Plasterboard

The joint venture will also have access to USG’s technologies in ceilings, cement board, fibre board, lightweight plasterboard and joint compound building product technologies.

Boral Chief Executive Officer and Managing Director Mike Kane says the joint venture would help leverage Boral’s distribution position with complementary brands and markets, equip the Gypsum division for long term growth in Asia and strengthen Boral’s financial position.

“This transaction is a major step forward for Boral and our vision is to create a world-leading interior lining business in Asia, Australasia and the Middle East”, he says.

The two companies say they will spend $US50 million over the next two years rolling out new technologies whilst synergies amounting to $US50 million annually through manufacturing and freight cost savings as well as selling more product through existing sales channels will be generated within three years of the technologies being rolled out.

All up, the joint venture will have 633 million square meters in plasterboard manufacturing capacity along with a portfolio of existing building product operations.

Subject to relevant approvals, the two companies hope to have their joint venture in place by 31 January 2014.

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