Boral Limited and USG Corporation to Form a World-Leading Plasterboard & Ceilings Joint Venture in Asia, Australasia & the Middle East

October 16, 2013


  • Combines USG’s best-in-class building products technologies and strategic
    assets in Asia, New Zealand and the Middle East with Boral’s leading
    plasterboard manufacturing and distribution footprint in Asia and Australia
  • Leading share positions in most markets served and uniquely positioned for
    synergistic expansion
  • US$1.6 billion1 50/50 joint venture with operations in 12 countries across Asia,
    Australasia and the Middle East
  • USG to make upfront cash payment to Boral of US$500 million on completion2,
    with potential additional earn out payments to Boral of up to US$75 million


Boral Limited (ASX:BLD) and USG Corporation (NYSE:USG) today announced that they have
entered into agreements to form a strategic joint venture to create a world-leading building
business, USG Boral Building Products. The 50/50 joint venture will leverage the two companies’
iconic brands, complementary geographic footprints and technological expertise to deliver a
unique portfolio of building products across Asia, Australasia and the Middle East.

Boral will contribute its Gypsum division to the joint venture, which includes its plasterboard
operations in Australia and Asia. USG, the largest North American manufacturer of plasterboard,
will contribute its Asian and Middle Eastern businesses, as well as exclusive access to its worldleading
ceilings, cement board, fibre board, lightweight plasterboard and joint compound building
products technologies in the joint venture’s territory.

Bringing together the game-changing technologies and expertise of USG with Boral’s leading
manufacturing and distribution network in the region creates a vehicle that will deliver a superior
offering to one of the fastest growing plasterboard regions in the world. This combination is
expected to position the business with a significant competitive advantage and market leadership
position for the long-term.

“The transaction is a major step forward for Boral and our vision is to create a world-leading
interior linings business in Asia, Australasia and the Middle East,” said Boral’s CEO & Managing
Director, Mike Kane. “The joint venture strategically aligns with Boral’s goal to grow earnings
from Asia over the longer-term by effectively leveraging our extensive distribution position with
complementary building products and markets. In addition to equipping the Gypsum division for
long-term accelerated growth in Asia, the joint venture with USG creates a strong competitive
advantage for the Australian plasterboard business through the application of game-changing
technologies, significantly strengthens Boral’s financial position and provides greater strategic
flexibility to the Boral group. This joint venture will be value accretive for our shareholders.”

USG’s Chairman, President and CEO, Jim Metcalf, stated, “We are excited by the prospects for
profitable growth through this strategic partnership. We have long been focused on our strategic
plan to diversify our earnings and differentiate our business through innovation. The joint venture
with Boral, Asia’s leading plasterboard manufacturer and distributor, gives USG the reach to
immediately expand our world-leading building products operations outside North America, and
enables both companies to more effectively capitalize on market opportunities in some of the
world’s highest growth construction markets.”

The roll-out of new technologies across the joint venture operations will be phased over two
years and involve a total investment of approximately US$50 million, which is expected to be
self-funded through the joint venture.

The Joint Venture is anticipated to benefit from significant synergies, which will ramp up over
time and are expected to exceed US$50 million per annum within three years of the new
technologies being rolled out. Synergies will come from manufacturing and freight cost savings
and will also include revenue enhancements generated by a superior product offering and
complementary products that will be sold through existing sales channels.

Frederic de Rougemont, CEO of Boral Gypsum and appointed CEO of the joint venture, said:
“The combination of our gypsum and related businesses in Asia, Australasia and the Middle East
provides an unparalleled manufacturing and distribution footprint, encompassing some of the
highest growth markets in the world. The joint venture’s access to USG’s unrivalled technology
and continued innovation will provide the business with superior performing products that are
lighter, stronger and more efficient to manufacture, transport and install. This will build on Boral’s
well-established gypsum operations in the region, creating a formidable and sustainable
leadership position.”

The joint venture will be owned 50% by Boral and 50% by USG. In order to achieve an interest
of 50% in the joint venture, USG will pay Boral total cash payments (equalisation payments) of up
to US$575 million. USG’s equalisation payments to Boral will occur in tranches, with a portion
conditional on the business meeting budgeted targets, as follows:


  • US$500 million upon deal agreement completion;
  • US$25 million on the 3rd anniversary of completion if joint venture earnings targets have
    been achieved at that time;
  • US$50 million on the 5th anniversary of completion if joint venture earnings targets have
    been achieved at that time.


The joint venture will have 633 million m2 (6.8 BSF) of plasterboard manufacturing capacity
supplemented by an extensive portfolio of complementary building product operations spanning
12 countries. Management of the joint venture will be shared between Boral and USG with
Frederic de Rougemont from Boral Gypsum appointed as CEO and Paul Monzella from USG
Corporation appointed as CFO. USG will appoint the Chairman, Jennifer Scanlon, with the right
to appoint chairman alternating every two years.

Targeted completion is currently anticipated to occur on or by 31 January 2014 and is subject to
certain closing conditions, including Foreign Investment Review Board (FIRB) approval, third
party consents, and other conditions precedent as are customary for this type of transaction.
Further detail about the transaction, the joint venture assets, agreed joint venture terms and
company specific impacts are outlined in the accompanying presentation.

A joint-CEO presentation and conference call for investors will take place today at
10.30am (Australian Eastern Daylight Standard Time) / 6.30pm (US Central Standard Time).

Dial-in: Australia 1800 098 754 / +61 2 9338 7300; USA 1888 400 8039; Canada 1866 927 0848;
Hong Kong 800 967 072; Singapore 800 616 2252; UK: 080 8234 2459.
Conference ID: 81902152
The presentation will also be webcast via and

USG Corporation:
USG Corporation is a manufacturer and distributor of innovative, high-performance building
systems through its United States Gypsum Company, USG Interiors, LLC, L&W Supply
Corporation and other subsidiaries. Headquartered in Chicago, USG Worldwide operations serve
the commercial, residential, and repair and remodel construction markets, enabling our
customers to build the outstanding spaces where people live, work and play. USG wall, ceiling,
exterior sheathing, flooring underlayment and roofing systems provide leading-edge building
solutions, while L&W Supply branch locations efficiently stock and deliver building materials
throughout the United States. USG and its subsidiaries are proud sponsors of the U.S Olympic
and Paralympic teams and the Canadian Olympic team. For additional information, visit

Boral is a global building products and construction materials group, headquartered in Sydney,
Australia. With leading positions in Cement & Construction Materials in Australia; Plasterboard in
Australia and Asia; and Cladding and Roof Tiles in the USA, Boral produces and distributes a
broad range of materials and products including quarry products, cement, fly ash, pre-mix
concrete, asphalt, clay bricks, clay and concrete roof tiles, concrete masonry products,
plasterboard, windows and timber. See for more information.