Gypsum industry news

US: German building materials company Gebr. Knauf KG is set to acquire Chicago-based USG Corporation in a US$7bn deal, following months of discussion and heated exchange between the two companies. USG shareholders will receive US$44/share, according to the terms of the agreement. This consists of US$43.50/share in cash payable and US$0.50/share in a special dividend after shareholders approve the deal, which is expected to close in early 2019.

Knauf intends to continue operations from USG’s headquarters in Chicago.
Berkshire Hathaway and its subsidiaries, which own a collective 31% of USG, have agreed to vote in favour of the acquisition. The deal allows Berkshire to leave what CEO Warren Buffet deemed a ‘disappointing’ investment, according to Bloomberg.

In 2001, USG filed for bankruptcy protection and was later saved by an investment from Berkshire in 2006. Knauf has been pursuing USG since November 2017. In March 2018, USG rejected an offer by Knauf to purchase the construction materials company for US$5.9bn.

“We are excited to enter into an agreement to acquire USG,” said Alexander Knauf, general partner of Knauf, in a company statement. “As a long-term USG shareholder, we greatly admire USG's strong brands, leading market positions in North American wallboard and ceilings and highly talented employee base."

Jennifer Scanlon, president and chief executive officer of USG, added, “Our Board has worked diligently to evaluate all strategic options to maximise value for our shareholders, and we are pleased to have reached this agreement, which provides our shareholders with significant and certain cash value. We believe this transaction will create new opportunities for both companies' customers and will benefit USG's employees who will be part of a truly global building products company.”

Germany: Schenck Process has signed an agreement to buy Raymond Bartlett Snow from the Arvos Group. The acquisition is expected to close on 29 June 2018. No value for the deal has been disclosed.

Raymond Bartlett Snow designs and builds size reduction, classification and thermal processing equipment. It operates locations in the US, India and Brazil, all of which will become part of the Schenck Process Group.

US: The board of directors of USG has authorised its management to commence negotiations with Germany’s Knauf regarding a potential sale of the company. USG has advised Knauf that it is prepared to agree to a customary confidentiality agreement to facilitate sharing appropriate due diligence information. The board added that it, “…remains committed to acting in the best interests of all shareholders and will evaluate all options to do so.”

Knauf made a US$5.9bn bid for USG in March 2018 that was rejected. It then urged shareholders to vote against director nominees at USG’s annual general meeting. Warren Buffett, the chief executive officer Berkshire Hathaway, subsequently agreed to back the opposition to the directors. Berkshire Hathaway holds a 31% stake in USG and Knauf holds a 10.5% stake.

Germany: Australia’s James Hardie has completed its acquisition of Fermacell for Euro473m. It agreed to buy the gypsum wallboard producer from Xella International in November 2017 and then took out a loan in December 2017 to cover the purchase.

James Hardie plans to include European Building Products segment in its report of quarterly results from the first quarter of 2019. This new segment will include the on-going James Hardie European Fiber Cement business and the newly acquired Fermacell business. The current International Fiber Cement segment will be renamed Asia Pacific Fiber Cement and will include its Australia, New Zealand and Philippines businesses.

Germany: Australia’s James Hardie expects to complete its acquisition of Fermacell in early April 2018. It agreed to buy the gypsum wallboard producer from Xella International in November 2017. Louis Gries, chief executive officer of James Hardie said that there had been no impediments in the transaction.

Spain: Etex has become the sole shareholder of Pladur following the completion of a deal to buy all the remaining shares from Coemac. The deal was first announced in July 2017 and following customary closing conditions it closed on 22 December 2017. Pladur operates one gypsum wallboard plant near Madrid and it has been building a second plant at Gelsa that was due to open in mid-2017.

Germany: Australia’s James Hardie is to buy Fermacell for Euro473m. The Australian company has entered into a definitive agreement to buy XI (DL) Holdings and its subsidiaries, including the gypsum fibreboard producer. The deal is expected to close in the first quarter 2018.

“Fermacell’s market position, go-to-market strategy and strong management team will enable us to scale and accelerate our European business, which has long been a strategic goal. Fermacell will diversify our geographic, product and end-market portfolio, complementing our strong positions in North America and Australasia, and will create significant growth opportunities and drive long-term value for customers, employees and shareholders,” said Louis Gries, chief executive officer (EO) of James Hardie.

Jack Truong, President, International Operations of James Hardie, added that Fermacell’s ‘broad’ European footprint and capabilities were expected to ‘accelerate’ his company’s fibre cement business growth in Europe. James Hardie is also ‘excited’ about the future growth opportunities of Fermacell’s core business in regions such as the UK, France, and Scandinavia.

US: The gypsum wallboard and suspended ceilings distributor GMS Inc. has acquired substantially all of the operating assets of Pennsylvania, US-based Washington Builder’s Supply Company (WBS) to expand footprint in Western Pennsylvania, according to a company release. Terms of the transaction were not disclosed.

WBS will join Ohio Valley Drywall Supply, a GMS company acquired in 2015, which serves residential and commercial customers in Pittsburgh and the surrounding areas.

WBS and Ohio Valley will stock a wide variety of products including wallboard, steel, insulation and construction accessories, along with a full range of commercial and residential services, such as after-hours and weekend delivery as needed.

GMS operates a network of more than 210 distribution centres across the United States. The company’s product offerings include wallboard, suspended ceilings systems and complementary interior construction materials.

Denmark: Environmental services company Reconor, a subsidiary of private equity firm Agilitas, has purchased Mijodan for an undisclosed sum. Mijodan, based in South Jutland, recycles a number of products, including gypsum wallboard.

Argentina: Centurion Minerals is in the process of buying the remaining 50% share in the Ana Sofia Agri-Gypsum Project from its joint-venture partner Demetra Minerals. The final transaction will be subject to shareholder and regulatory approval.

"Owning 100% of the Ana Sofia Agri-Gypsum Project has been our goal since we were first introduced to the project. Despite unprecedented weather-related disruptions for the agricultural industry in South America in 2017, we see these short-term challenges as long-term benefits that will drive increased agri-gypsum demand," said Centurion's president and chief executive officer, David Tafel.