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Knauf acquires USG for $7B

German manufacturer Knauf has agreed to a $7 billion deal to purchase Chicago-based USG, which would bring two of the largest building materials makers together.

STAFF REPORT

Knauf’s pursuit to purchase American-based USG has come to fruition.

Knauf, a German building materials maker with a plant in Shelbyville, Indiana, has reached an agreement to buy Chicago-based USG, an American building products maker, for $7 billion.

The deal will pay USG shareholders $44 per share. 

USG will keep its headquarters in Chicago, according to a story in Monday’s Chicago Tribune.

Knauf’s pursuit of USG reached a standstill when Berkshire Hathaway Inc., which owns approximately 31 percent of USG shares, rejected an offer of $42 a share.

Knauf, which owns nearly 10 percent of USG, then asked shareholders to vote against board nominees and show support for the deal which will combine the building materials companies.

“Our board has worked diligently to evaluate all strategic options to maximize value for our shareholders, and we are pleased to have reached this agreement, which provides our shareholders with significant and certain cash value,” Jennifer Scanlon, president and chief executive officer of USG, said in a joint new release. “We believe this transaction will create new opportunities for both companies’ customers and will benefit USG’s employees, who will be part of a truly global building products company.”

The deal still requires shareholder and regulatory approval.

USG was created in 1902 as United States Gypsum Co. It had 6,800 employees and annual sales of $3.2 billion last year. 

USG is currently the biggest maker of gypsum wallboard in the U.S.