Building products group Boral will receive $US575 million ($601.8 million) from the planned merger of all of its plasterboard interests with USG, as part of a merger of the two group’s non-US and European plasterboard interests.
The venture will hold all Asia, Pacific and Middle East plasterboard interests of the two companies in a 50:50 venture.
The negotiations include Boral receiving $US575 million from USG to equalise the two groups contribution to the venture, with Boral set to receive $US599 million up front.
The venture will have manufacturing and distribution spread across 12 countries.
The decision to form the venture follows ongoing rationalisation of Boral’s operations, which included taking full control of a gypsum venture over the past few years.
The venture will gain access to technology of USG, a large US gypsum and plasterboard group.
The venture has an asset value of $US1.6 billion which is comprised of Boral assets totalling $A1.35 billion and $US250 million of assets and intellectual property from USG.
Boral said most of the funds received will be used to reduce debt, although it flagged some “capital management initiatives” depending non market conditions.
The $US500 million will reduce gearing to 22 per cent from 30 per cent, Boral said.
The venture will slice $14 million off Boral’s year to June, 2014, net profit, it said.