Buffett’s USG to Pay Boral Up to $575 Million in Plaster Venture

USG Corp. (USG), whose largest investor is Warren Buffett’s Berkshire Hathaway Inc., agreed to pay Boral Ltd. (BLD) as much as $575 million to create a jointly owned building materials business spanning Asia and the Middle East.

Sydney-based Boral will inject its gypsum unit into the venture, the companies said in a statement today. Chicago-based USG will contribute its Asian and Middle Eastern units and exclusive access to products such as ceilings and plasterboard.

Boral plans to use USG’s payment to cut debt after posting the company’s first annual loss since 2010. The new business, which may allow USG to cut reliance on North America, will have assets valued at $1.6 billion and sell products in 12 nations including Boral’s largest market, Australia, the companies said.

“We have long been focused on our strategic plan to diversify our earnings and differentiate our business through innovation,” USG Chairman and Chief Executive Officer Jim Metcalf said in the statement.

Under the terms of the agreement, USG will pay Boral $500 million in cash when the deal is completed -- scheduled for January 2014 -- and as much as $75 million if the venture, named USG Boral Building Products, meets certain earnings targets.

To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net

To contact the editor responsible for this story: Sarah Rabil at srabil@bloomberg.net

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