NEW YORK/LONDON Lafarge LAFP.PA, the world's largest cement maker, has agreed to sell its North American gypsum business to U.S. private equity firm Lone Star for $700 million as part of efforts to refocus and cut debt.
The transaction, which confirms an earlier Reuters story, is expected to close "very soon", Lafarge said on Monday.
The French company has been shedding non-core assets and refocusing on its cement and concrete business after the debt it racked up to buy Middle Eastern cement-maker Orascom in 2007 led to the loss of its investment grade rating in 2011.
The news of the disposal lifted shares in Lafarge, which closed as the only gainer on the Paris blue-chip CAC 40 .FCHI<0#.FCHI> index, ending the trading session up 2 percent at 47.18 euros while the index was 1.7 percent lower.
"In our view, $700 million is a good price for these assets from a non-industry buyer which has no synergies," Jefferies analysts wrote in a note to clients.
The North American gypsum business, which produces plasterboard, generates earnings before interest, tax, depreciation and amortization (EBITDA) of about $75 million and attracted bids from other private equity firms, a source familiar with the matter told Reuters earlier.
Lafarge, which aims to lower its debt below 10 billion euros in the second half of 2013, managed close to 900 million euros ($1.2 billion) worth of divestments last year, with further assets expected to go on the block in 2013.
In 2011, the group sold its European and South American gypsum divisions as well as its Australian and Asian gypsum operations.
In January, it sold six U.S. quarries worth $160 million. ($1 = 0.7612 euros)
(Reporting by Greg Roumeliotis in New York, Anjuli Davies in London; Additional reporting by Elena Berton in Paris; Editing by Mark Potter/Ruth Pitchford)