Lafarge and Boral: gypsum assets merger in Asia

24 February 2000

Lafarge and Boral have reached agreement to move towards merging their Gypsum Products interests in South Korea, China and ASEAN countries, where they each have separately established strong and complementary positions.

The new joint venture will have sales of approximately US$130m in its first year of operation and nearly 200 million square metres of gypsum board capacity, four specialist ceiling tile plants, one metal profile rolling mill and 150,000 tonnes of capacity of compounds and industrial plasters with well established distribution networks.

The new company will be the market leader in South Korea, China (Shanghai), Malaysia, Indonesia and the Philippines.

It will be well positioned to take advantage of new opportunities in the now strengthening economies of Asia as a result of its size, country spread and the greater synergies to be gained over those achievable within the existing businesses.

Lafarge will contribute around 70% of the assets at the formation of the joint venture and Boral has the rights to increase its initial minority shareholding to 50% preferentially by financing development projects in the first three years. Voting rights at Board level will be equal from formation.

Completion is expected to be before the end of May 2000.

Lafarge and Boral are both major international building materials companies and already operate a joint venture in the rooftile business in the USA.

World leader in construction materials, Lafarge holds top ranking positions in each of its five Divisions: Cement, Aggregates & Concrete, Roofing, Gypsum and Specialty Products. The Group employs about 70,000 people in 68 countries. It generated sales of US$10.5 billion in 1999.

Boral (headquartered in Sydney Australia) holds leading positions in each of the building and construction material businesses it operates in Australia, Asia and the USA. It has global sales of A$3.8 billion and employs over 15,000 employees.

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