Gypsum industry news
US: Eagle Materials has approved a plan to spin off its heavy materials and light materials businesses into two publicly traded entities, bowing to pressure from hedge fund Sachem Head Capital Management.
Sachem, which disclosed a 9% stake in Eagle Materials in March 2019, had earlier urged Eagle to separate its cement and wallboard businesses. After the split, Eagle’s heavy materials business will operate as a cement company, and the light materials business will continue to make gypsum wallboard and recycled paperboard.
“We believe that by pursuing the actions announced today the Eagle board is taking significant steps to unlock the company’s inherent value,” said Sachem Managing Partner Scott Ferguson, also commenting on planned changes to Eagle’s oil and gas proppants businesses.
The separation will be by a tax-free spin-off to Eagle shareholders and is expected to be completed in the first half of 2020. Both the new companies will have their headquarters in Dallas, Texas.
