Australia's Boral and USG Corp announce $1.6 billion joint venture
SYDNEY (Reuters) - Australian building materials maker Boral Ltd (BLD.AX) and its U.S. peer USG Corp (USG.N) said on Thursday they had agreed to a joint venture to bring together Boral's manufacturing and distribution network and USG's technologies.
The joint venture, which will make plasterboard and ceilings, will be owned 50 percent by Boral and 50 percent by USG, the companies said in a statement.
USG will pay up to $575 million to Boral and the $1.6 billion joint venture will have operations in 12 countries, the statement said.
The JV is expected to complete by January 2014, and Boral said its net profit after tax for the 2014 fiscal year would be reduced by around A$15 million ($14 million) as a result.
The bricks, roof tiles and cement maker has been wrestling with weak building activity and pricing pressure. It has been shedding 800 jobs since January to cut costs.
Boral shares closed at A$4.75 on Wednesday, having risen almost 9 percent this year to underperform the 13 percent rise in the broader market. USG shares closed down 1.3 percent at $27 on Wednesday.
($1 = 1.0494 Australian dollars)
(Reporting by Maggie Lu Yueyang; Editing by Grant McCool)
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