USG Corporation and Boral Limited announce the formation of their world-leading Plasterboard & Ceilings joint venture, USG Boral

  USG Corporation and Boral Limited announce the formation of their
  world-leading Plasterboard & Ceilings joint venture, USG Boral Building
  Products

Business Wire

CHICAGO -- February 27, 2014

USG Corporation (NYSE: USG) and Boral Limited (ASX: BLD) today announce the
completion of their previously communicated 50/50 strategic joint venture, USG
Boral Building Products. The joint venture creates a world-leading building
products business with sales and operations across Asia, Australasia and the
Middle East.

In connection with the joint venture, Boral has contributed its Gypsum
division, which includes its plasterboard operations in Australia and Asia,
and USG has contributed its Asian and Middle Eastern businesses, as well as
exclusive access in the joint venture’s territory to its world-leading
ceilings, cement board, fibre board, and lightweight plasterboard and joint
compound building products technologies.

As consideration for its 50% ownership in the joint venture, in addition to
contributing its Asian and Middle Eastern businesses and certain intellectual
property, USG made a cash payment of US$500 million to Boral. Boral will also
have the opportunity for up to US$75 million in earn out payments over five
years if the joint venture achieves specific performance targets.

USG, which funded its cash payment to Boral with the net proceeds of a
recently completed US$350 million senior note offering and cash on hand, made
an additional cash payment to Boral of US$13 million based on a customary
initial estimate of the net debt and working capital positions of the
contributed businesses. Additional cash adjustments are expected upon
finalisation of the accounts as of 28 February, 2014.

USG’s Chairman, President and CEO Jim Metcalf stated, “The joint venture gives
USG an immediate, significant presence across some of the fastest growing
construction markets in the world, and positions both USG and Boral to win
over the long-term in Asia, Australasia, and the Middle East. Our teams will
work quickly to deploy USG’s technologies to the facilities in the region and
we expect that our combined efforts will enable the joint venture and its
customers to achieve greater productivity and profitability.”

USG Boral Building Products has 633 million m^2 (6.8 BSF) of plasterboard
manufacturing capacity across 25 plasterboard lines and 12 countries. Synergy
realisation will ramp up over time and is expected to exceed US$50 million per
annum within three years of the new technologies being rolled out.
Manufacturing and freight cost savings, revenue enhancements generated by a
superior product offering, and complementary products sold through existing
sales channels will drive synergies.

“The completion of the transaction is an important milestone in our joint
venture with USG. Our teams have come together effectively and productively
and have great momentum and determination to deliver on the strategic
imperatives of the joint venture. We are focused on maximising value for our
customers and our shareholders,” said Boral’s CEO & Managing Director, Mike
Kane. “The joint venture aligns with Boral’s goal to grow earnings from Asia
and to transform the business over the longer-term through innovative product
and manufacturing solutions. Boral’s balance sheet will also strengthen
considerably as a result of the transaction.”

Management of the joint venture will be shared between Boral and USG with
Frederic de Rougemont from Boral appointed as CEO and Paul Monzella from USG
appointed as CFO. USG has appointed the Chairman, Jennifer Scanlon, Senior
Vice President and President USG International. The right to appoint the
Chairman will alternate every two years.

About USG Corporation:

USG Corporation is a manufacturer and distributor of innovative,
high-performance building systems through its United States Gypsum Company,
USG Interiors, LLC, L&W Supply Corporation and other subsidiaries.
Headquartered in Chicago, USG Worldwide operations serve the commercial,
residential, and repair and remodel construction markets, enabling our
customers to build the outstanding spaces where people live, work and play.
USG wall, ceiling, exterior sheathing, flooring underlayment and roofing
systems provide leading-edge building solutions, while L&W Supply branch
locations efficiently stock and deliver building materials throughout the
United States. USG and its subsidiaries are proud sponsors of the U.S. Olympic
and Paralympic teams and the Canadian Olympic team. For additional
information, visit www.usg.com.

About Boral Limited:

Boral is a global building products and construction materials group,
headquartered in Sydney, Australia. With leading positions in Cement &
Construction Materials in Australia; Plasterboard in Australia and Asia; and
Cladding and Roof Tiles in the USA, Boral produces and distributes a broad
range of materials and products including quarry products, cement, fly ash,
pre-mix concrete, asphalt, clay bricks, clay and concrete roof tiles, concrete
masonry products, plasterboard and timber. See www.boral.com.au for more
information.

USG Cautionary Statement:

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 related to management’s
expectations about future conditions. Actual business, market or other
conditions may differ materially from management’s expectations and,
accordingly, may affect our sales and profitability or other results and
liquidity. Actual results may differ materially due to various other factors,
including: economic conditions, such as the levels of new home and other
construction activity, employment levels, the availability of mortgage,
construction and other financing, mortgage and other interest rates, housing
affordability and supply, the levels of foreclosures and home resales,
currency exchange rates and consumer confidence; capital markets conditions
and the availability of borrowings under our credit agreement or other
financings; our substantial indebtedness and our ability to incur substantial
additional indebtedness; competitive conditions, such as price, service and
product competition; shortages in raw materials; changes in raw material and
energy costs; volatility in the assumptions used to determine the funded
status of our pension plans; the loss of one or more major customers and our
customers’ ability to meet their financial obligations to us; capacity
utilization rates for us and the industry; our ability to expand into new
geographic markets and the stability of such markets; our ability to
successfully operate the joint venture with Boral Limited, including risks
that our joint venture partner, Boral Limited, may not fulfill its obligations
as an investor or may take actions that are inconsistent with our objectives;
our ability to protect our intellectual property and other proprietary rights;
changes in laws or regulations, including environmental and safety
regulations; the satisfactory performance of certain business functions by
third party service providers; our ability to achieve anticipated savings from
cost reduction programs; the outcome in contested litigation matters; the
effects of acts of terrorism or war upon domestic and international economies
and financial markets; and acts of God. We assume no obligation to update any
forward-looking information contained in this press release. Additional
information concerning these and other factors may be found in our filings
with the Securities and Exchange Commission, including the “Risk Factors” in
our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

Contact:

USG Corporation
Matthew Ackley
Senior Manager, Investor Relations
Telephone: +1 312-436-6263
investorrelations@usg.com
or
Robert Williams
Senior Director, Corporate Communications
+1 312-436-4356
rewilliams@usg.com
or
Boral Limited ABN: 13 008 421 761
Kylie FitzGerald
Group Communications & Investor Relations Director
Telephone: +61 2 9220 6591
kylie.fitzgerald@boral.com.au
or
Luis Garcia
Media Enquiries
+61 419 239 552
 
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