Gypsum industry news

US: Germany’s Knauf has appointed Christopher Griffin as the head of USG following the completion of its acquisition. Griffin, currently the chief executive officer (CEO) of Knauf Insulation North America, holds over 35 years of experience in the building materials industry, including 18 years with USG where he served in several senior roles, including chief operating officer.

"Bringing USG and Knauf together offers a compelling value proposition for both USG's and Knauf's customers. Knauf is committed to growing the strength of USG brands and its presence in North America. Our highly complementary businesses, products, and global footprint position the combined company to better meet the needs of customers. Following the closing of the merger, Knauf intends to maintain USG's existing corporate headquarters in Chicago," said Alexander Knauf, General Partner of Knauf.

Other personnel changes of note include the appointment of Joseph W Holmes as the Senior Vice President of the Gypsum Division. Stephanie Holdt, currently Vice President of Controlling at Knauf will join USG as Senior Vice President and chief financial officer.

US: GMS’s half-year wallboard sales have risen due to its acquisition of Canada’s Titan on 1 June 2018 and rising prices. Its wallboard sales rose by 14% year-on-year to US$652m in the half year to 31 October 2018, from US$573m in the same period in 2017. Overall, the wallboard distributor’s net sales increased by 25% to US$1.61bn.

US: USG shareholders have approved an agreement and plan to accept Knauf’s takeover of the company. Approximately 99% of all votes cast voted in favour of the adoption of the agreement, representing approximately 88% of all outstanding shares as of 21 August 2018. Adoption of the merger agreement by USG stockholders is a condition to the closing of the merger. The merger is subject to certain other customary closing conditions, including receipt of regulatory approvals. The company currently expects the deal to close in early 2019.

Australia: Australia’s competition watchdog is investigating Knauf”s proposed US$7bn takeover of Boral’s US-based joint venture partner USG for potential breach of its merger rules. The Boral-USG joint venture is the biggest gypsum wallboard supplier in Australia, followed by CSR. Knauf is third largest, meaning that the takeover would combine the number three and number one providers in Australia.

Boral CEO Mike Kane said that he had formally served a notice of default to Knauf, triggering an automatic review of the value of the joint venture. When the valuation is completed Boral will then decide whether to exercise its right of first refusal over the Asian and Australian joint venture operations. This is expected to be finalised during October 2018.

US: L&W Supply Corp., a distributor of gypsum wallboard, ceiling systems, steel framing and other building materials for contractors, has announced the acquisition of Rose & Walker Supply.

Rose & Walker is a five-branch distribution company based in Columbus, Ohio. The family-owned business started in 1986 and provides wallboard products, metal studs, ceiling systems and insulation. Rose & Walker has branches in Bloomington, Columbus, Lafayette, Indianapolis and Terre Haute.

L&W says that, as a leading distributor of interior building products, the acquisition supports its overall growth strategy. With this acquisition, L&W now operates 163 locations in 35 states.

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.