Gypsum industry news

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.

Australia: Knauf is reportedly looking for buyers for its business in Australia. The Royal Bank of Canada and PricewaterhouseCoopers have been helping the gypsum wallboard producer manage a potential sale, according to the Australian newspaper. The German company operates three wallboard plants in the country. They are thought to be worth up to US$200m.

Any such sale is likely to be related to Knauf’s acquisition of USG in 2019. The US-based company owns a 50% share in USG-Boral, which also operates wallboard plants in Australia. Boral said in April 2020 that it thought it unlikely that the Australian Competition and Consumer Commission (ACCC) would approve its plans for USG-Boral so far. If Knauf were able to sell its other assets in Australia then its options with USG-Boral are more likely to be accepted. Speculation has mounted in the local press about partial or full asset divestments by Knauf in Australia since the USG acquisition.

Australia: Boral has reported that, in most jurisdictions, its activities are currently considered to be within the critical infrastructure and construction sectors that are permitted and encouraged to continue as essential businesses. This includes Boral’s US Fly Ash business, which provides an essential service to the energy sector. In some areas however, particularly in North America and Asia, more stringent mandates and restrictions have resulted in temporary closures of several operations.

In addition, demand is declining in most markets and is expected to continue to decline, particularly in residential construction markets where the pipeline of work is substantially reducing in all geographies.

As a result, where it has sufficient inventory levels to supply customers, production curtailments are planned and are now taking place, including shift reductions and temporary plant closures. Boral says that these actions will help to conserve cash and minimise any unintended inventory build-up.

Boral is supporting employees impacted by temporary closures with access to paid leave, unpaid leave, flexible and remote working arrangements (where possible) and assistance with accessing relevant government support.

Australia: Boral has updated the market on its transaction with Knauf in relation to its USG Boral joint venture. On 19 March 2020, Boral announced that its view was that the Australian Competition and Consumer Commission (ACCC) was unlikely to approve the call option in relation to the Australian and New Zealand business. In further discussions between Boral and Knauf, it has now become clear that obtaining the necessary regulatory approvals required to allow the transaction to be implemented as signed in August 2019 is not achievable by the 30 June 2020 deadline. Other conditions to the transaction also remain outstanding.

As a result, Boral and Knauf will consider a range of potential options, with Boral’s objective being to target a cash neutral transaction rather than a transaction with a significant funding requirement for Boral. Discussions are at a preliminary stage and any revised transaction remains subject to agreement between Boral and Knauf, and ultimately will also require the approval of regulators including the ACCC and New Zealand Commerce Commission (NZCC). Given this, the company’s pre-existing US$400m acquisition bridge facility, put in place for the purpose of completing the transaction with Knauf, was allowed to lapse.

Australia: Gypsum wallboard product manufacturer Gyprock has decided to put on hold a planned price increase due to start in June 2020 in response to the coronavirus outbreak. It said that it was doing everything it could to make it sites safe for customers and staff and that its plants, warehouses and trade stores remained open.