European construction material producer Saint-Gobain has agreed to acquire US-based gypsum product manufacturing company Continental Building Products for $1.4bn. The acquisition is expected to expand Saint-Gobain’s asset portfolio and improve its ability to provide innovative solutions to a broader customer base.
It will also create opportunities for about $50m in cost synergies, improve performance and also increase the company’s presence in high-growth regions in the US. Continental Building Products chairman Edward Bosowski and CEO Jay Bachmann said: “Saint-Gobain is the ideal strategic partner with the resources to support our development, commitment to operational excellence and global platform that will enable us to continue to provide outstanding customer service.”
Saint-Gobain said that the acquisition is part of its portfolio optimisation strategy, one of the two pillars of the transformation programme ‘Transform & Grow’.
Subject to the approval of Continental Building Products shareholders, US Antitrust approval and the fulfillment of other customary closing conditions, the transaction is expected to close in the second half of 2020.
For the transaction, Lazard and Morgan Stanley are serving as financial advisors and Cleary Gottlieb Steen & Hamilton is serving as legal counsel to Saint-Gobain. Saint-Gobain chairman and CEO Pierre-André de Chalendar and chief operating officer Benoit Bazin said: “The acquisition of Continental Building Products is a unique opportunity allowing Saint-Gobain to move to the forefront of plasterboard and construction solutions in North America.
“With the very strong industrial platform and expert teams that Continental Building Products brings, Saint-Gobain will be able to accelerate the deployment of its innovative product offering in order to better serve customers.
“We share the same industrial and commercial cultures as the Continental Building Products’ teams and are confident that together we can leverage our expertise and know-how to drive sustainable and profitable growth, to the benefit of our customers and the end consumer.
“This transaction will enable Saint-Gobain to enhance its growth and profitability profile, in line with the ‘Transform & Grow’ program, and to create value for our shareholders.”