Lafarge Sells North American Gypsum Business to Lone Star Funds
Lafarge SA (LG), the world’s biggest cement maker, agreed to sell its North American Gypsum business with an enterprise value of $700 million to an affiliate of Lone Star Funds.
The business, which manufactures gypsum wallboards and joint compounds in plants in the U.S. and Canada, had 2012 sales of $310 million, the Paris-based company said in e-mailed statement today.
The deal, which is predicted to close “very soon,” will help Lafarge to focus on the cement, aggregates and ready-mix concrete businesses, the company said.
Chief Executive Officer Bruno Lafont is selling assets to repair a credit rating that has fallen below investment grade. He’s also cutting jobs and procurement costs and pushing sales of higher-margin services and products to counter a construction slump in Europe and political turmoil in the Middle East.
The stock rose 1.9 percent in Paris trading today, giving the company a market value of 13.6 billion euros ($17.8 billion). Lafarge has dropped 2.2 percent this year, while the French benchmark CAC 40 index declined 1.3 percent.
Lafarge’s debt shrank by 4 percent at the end of first quarter from a year earlier to 11.8 billion euros. Lafont has set a goal to trim the company’s debt below 10 billion euros this year.
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