Gypsum industry news

Australia: Boral has rejected a proposed US$5/share takeover bid by Seven Group Holdings. The building materials producer received the bid on 10 May 2021 and then rejected it the following day, according to the Financial Review newspaper. Seven Group Holdings started buying shares in Boral in March 2020 and reached a 23% stake in the company by April 2021. Boral has continued a share buy-back programme it commenced in April 2021 as part of its response to the takeover attempt. Sources quoted by the newspaper also expect Boral to work with investment bank Jarden Australia in retaliation to Seven Group Holdings’ actions.

Australia: Boral has sold its 50% stake in USG Boral to Germany-based Knauf for US$1.02bn. The profit on sale after tax will go towards reducing the group’s net debt by 21% to US$1.15bn from US$1.45bn. This will leave a US$763,000 surplus for reinvestment or return to investors.

Following on from the sale, Boral has launched a share buy-back, ending in April 2022. It intends to purchase 10% of shares on issue. The group says that the USG Boral sale proceeds will fund the investment.

Chief executive officer and managing director Zlatko Todorcevski said “The sale of our 50% interest in USG Boral to Knauf for an attractive premium creates substantial value for Boral’s shareholders. The sale enables Boral to reduce net debt to our current target and create surplus capital available for return to shareholders, which is consistent with Boral’s financial framework.” He added “We believe that an on-market buy-back is the most effective method of returning this surplus capital to our shareholders.”

Belgium: Etex’s full-year consolidated net sales were Euro2.62bn, down by 11% year-on-year from Euro2.94bn. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 16% to Euro468m from Euro557m. The group called its bottom-line performance ‘stunning.’ It reduced its debt by 95% to Euro15.0m from Euro331m.

The coronavirus outbreak impacted performance across all regions. At the peak of the outbreak’s impact on the group’s operations in April 2020, it had suspended operations at 48% of its facilities globally. In Europe, sales increased year-on-year in Germany and Romania. This, a dynamic plasterboard market in the Netherlands and ‘good’ group performance in Eastern Europe failed to offset the regional decline. The impact was notably severe in the Benelux countries and the UK in the second quarter of 2020. In Latin America, sales were comparable with 2019 levels on a like-for-like basis. Asian and African sales experienced a decline, partly offset by the opening of new markets in Australia prior to the acquisition of Knauf Plasterboard in February 2021.

Chief executive officer Paul Van Oyen and chair Jean-Louis de Cartier de Marchienne said, “Although our order book for the first half of 2021 is positive, we expect our revenue to be affected by Covid-19-related volatility this year and the next. Despite this forecast, the performance culture that we have invested in over the last year is firmly in place and delivering results. In addition, our strategic acceleration of sustainability and customer experience initiatives will continue to bear fruit moving forward.” They added, “The acquisitions we made in 2020 will fuel our future growth in high-potential markets. In 2021, we will continue to identify new opportunities, as we are currently in an excellent position to make significant additional investments.”

Australia: Albacutya Gypsum, based in Victoria, has been embroiled in confusion surrounding a five-day snap coronavirus lockdown in the state. The agricultural gypsum business, which operates from a quarry in Rainbow, was forced to temporarily close in mid-February 2021 due to uncertainty over whether it was an essential service or not, according to the Australian Broadcasting Corporation. However, local farmers, who are deemed ‘essential’ continued to require the product. The owners say the closure cost them around US$15,000 in lost income.

Australia: Cohiba Minerals has announced plans to raise US$1.5m through a share purchase plan. It plans to use the money to expand its mineral extraction operations across Australia, including the finalisation of a mining lease for its Pyramid Lake gypsum mine in Western Australia.

The company said, “Some of the funding will also be applied to working capital to achieve these ends.”

Australia: Boral has given details of its US$1.02bn sale of the 50% stake in USG Boral to Germany-based Knauf. It said that it expects the transaction to close in the 2021 financial year, adding, “If the transaction has not closed by 30 September 2021 – where Knauf has not completed certain divestments required by regulators – then, if either party terminates, Knauf must pay Boral a termination fee of US$50.0m.”

Chief executive officer (CEO) and managing director Zlatko Todorcevski said, “We have been working with Knauf for some time to find the best path forward for the business following Knauf’s acquisition of our joint venture partner USG. We recognise that it makes sense for Knauf – being the world’s largest plasterboard player – to have 100% ownership of the business. USG Boral is a great business, and very well positioned to perform strongly under the ownership of Knauf. The strength of the joint venture business and its prospects are fully reflected in the sale price as demonstrated by the attractive premium, which is a great outcome for Boral shareholders. The sale of Boral’s interest in USG Boral to Knauf will be a step to simplifying Boral’s geographic footprint and product portfolio.”

Final cash proceeds “will be applied to reduce net debt and fund growth investment in the retained portfolio” and remain subject to “post-completion adjustments.”

Australia: Belgium-based Etex has agreed to buy Knauf Australia from Germany-based Knauf for an undisclosed sum. The company’s portfolio consists of three gypsum wallboard plants, located in Altona, Victoria, Matraville, New South Wales and Bundaberg, Queensland, and it employs over 300 people. The Australian newspaper has reported that Etex plans to treat the newly acquired asset as a going concern, in which it will retain existing staff, including management. The acquisition is subject to customary closing conditions, with finalisation expected in early 2021.

Paul Van Oyen, the chief executive officer (CEO) of Etex said, “This transaction is a major milestone in the execution of our strategic roadmap initiated two years ago. Since then, we progressively exited non-core activities, such as the clay and concrete roof tiles business, that no longer fits with our portfolio. Our strategy is focused on being a leader in lightweight solutions and modular construction, offering sustainable, cost-effective, high-performing and inspiring building solutions to our customers. Plasterboards play a key role in such solutions, and we are looking forward to collaborating closely with our new colleagues to open up new opportunities for growth.”

Etex previously acquired Lafarge’s European and South American gypsum wallboard assets at the same time as Knauf acquired the entity now known as Knauf Australia from Lafarge in 2011. Knauf maintains a presence in the Australian gypsum wallboard sector via its partnership with Boral, concluded in October 2020.

Australia: Belgium-based Etex has hired financial services provider JP Morgan to help it buy Knauf’s Australian gypsum wallboard portfolio, valued at around US$293m. The Australian newspaper reports that Saint-Gobain and China National Building Material (CNBM) are also interested in the sale.

Knauf is divesting the assets to satisfy the Australian Competition and Consumer Commission’s fair play rules following its purchase of Boral’s stake in the USG-Boral gypsum wallboard joint venture for US$1.05bn. The companies have until September 2020 to finalise the transaction.

Australia/Singapore: Knauf has agreed to buy Boral’s 50% stake in USG Boral for US$1.02bn, bringing its total stake in the former Boral and US-based USG joint venture to 100%. The joint-venture includes gypsum wallboard-based businesses in Australia, New Zealand, Asia and the Middle East. The deal is “subject to typical conditions precedent including in relation to regulatory matters.”

Boral chief executive officer (CEO) and managing director Zlatko Todorcevski said, “We have been working with Knauf for some time to find the best path forward for the business following Knauf’s acquisition of our joint venture partner USG. We recognise that it makes sense for Knauf – being the world’s largest gypsum wallboard player – to have 100% ownership of the business. USG Boral is a great business, and very well positioned to perform strongly under the ownership of Knauf. The strength of the joint venture business and its prospects are fully reflected in the sale price, as demonstrated by the attractive premium, which is a great outcome for Boral shareholders. The sale of Boral’s interest in USG Boral to Knauf will be a step to simplifying Boral’s geographic footprint and product portfolio.”

Australia: France-based Saint-Gobain is reportedly considering the purchase of Germany-based Knauf’s US$284m Australian gypsum wallboard business. The Australian newspaper has also named Saint-Gobain as a potential buyer of USG Boral’s US$2.48bn US business. Separately, China National Building Material (CNBM) has been linked to the Knauf sale. Any such deals would be subject to anti-competitiveness checks.