Construction materials manufacturer Boral (ASX:BLD)
is accelerating the downgrade of the company’s footprint in the US market, having agreed to a divestment of the company’s North American production assets.
Boral has accepted an offer worth $2.9 billion from US company Westlake Chemical to takeover Boral’s North American building products operations.
The $8.01 company determined the offer was in the best interests of Boral’s shareholders, following an extensive assessment of interest from high-profile suitors. Boral’s CEO & managing director Zlatko Todorcevski has tipped the transaction “to unlock significant value for Boral’s shareholders”
The funds acquired from the sale is expected to downgrade the North Sydney-based company’s net debt guidance by $200 million to $1.3 billion.
The proceeds from the deal will not be subject to any income tax obligations in US and Australian jurisdictions, due to the roll-over of losses.
Challenges related to the COVID-19 pandemic resulted Boral’s full-year loss of $1.14 billion in FY20. The financial struggle has forced the company to sell down its North American subsidiary’s assets to make up for losses.
The US selldown campaign has so far included the transfer of a 50 per cent interest in USG Boral to Gebr Knauf KG and divestment of Meridian Brick to Wienerberger. Both deals have generated a total of $1.76 billion
Shares in Boral (ASX:BLD)
are trading 0.2 per cent higher at $6.79