Australia's Boral and USG Corp announce $1.6 bln joint venture

Reuters

SYDNEY, Oct 17 (Reuters) - Australian building materialsmaker Boral Ltd and its U.S. peer USG Corp saidon Thursday they had agreed to a joint venture to bring togetherBoral's manufacturing and distribution network and USG'stechnologies.

The joint venture, which will make plasterboard andceilings, will be owned 50 percent by Boral and 50 percent byUSG, the companies said in a statement.

USG will pay up to $575 million to Boral and the $1.6billion joint venture will have operations in 12 countries, thestatement said.

The JV is expected to complete by January 2014, and Boralsaid its net profit after tax for the 2014 fiscal year would bereduced by around A$15 million ($14 million) as a result.

The bricks, roof tiles and cement maker has been wrestlingwith weak building activity and pricing pressure. It has beenshedding 800 jobs since January to cut costs.

Boral shares closed at A$4.75 on Wednesday, having risenalmost 9 percent this year to underperform the 13 percent risein the broader market. USG shares closed down 1.3 percent at $27on Wednesday.

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