Building products giant Boral has agreed to sell its half of the key USG Boral joint venture for $1.43 billion as it fights to regain credibility following its underperforming venture into the US market.
The company will book a pre-tax profit of $540 million on the sale.
Boral is also looking at ways to offload its North American building products businesses, Headwaters which it paid $3.5 billion for in 2016.
That deal cost chief executive Mike Kane his job with new CEO and Managing Director Zlatko Todorcevski wasting no time in restructuring the business, accepting a high offer for USG which reduces debt and pressures on the company to swiftly exit Headwaters.
USG Boral is the company’s venture with Germany-based Gebr Knauf KG, which includes the important plasterboard businesses in Australia, New Zealand, Asia and the Middle East.
Those businesses have faced market headwinds with the impact of the Covid-19 pandemic on construction.
Todorcevski said: “The sale of Boral’s interest in USG Boral to Knauf will be a step to simplifying Boral’s geographic footprint and product portfolio.
“We recognise that it makes sense for Knauf, being the world’s largest plasterboard player, to have 100 per cent ownership of the business.”
So Boral gives up its own ideas of globalisation and shrinks its geographic footprint to concentrate on local markets.
The company’s review its businesses concludes: “The portfolio review has confirmed that the integrated construction materials business in Borst has strong underpinnings with outstanding assets and positions.
“Plans are progressing to strengthen Boral Australia so that it is more customer focused, nimble and cost-efficient.”
Boral chairman, Kathryn Fagg is also retiring in the coming months.
Picture: USG Boral
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