Lafarge in € 1 billion gypsum sale

Lafarge is to sell its European and South American gypsum assets, which are worth € 1 billion (US$ 1.4 billion), to Belgian construction materials producer Etex.

The agreement would see Lafarge receive € 850 million (US$ 1.2 billion) in net cash together with a 20% interest in the combined European and South American gypsum businesses of both groups. Lafarge would be able to sell this stake to Etex after five years.

Lafarge's European and South American gypsum division manufactures gypsum wallboard and other

gypsum-based products such as plaster, joint compounds, and plaster blocks. In 2010, the operations reported consolidated revenues of € 895 million (US$ 1.3 billion), and earnings before interest, tax, depreciation and amortisation (EBITDA) of € 115 million (US$ 163 million).

The deal would see Etex build on its existing alliance with Lafarge in South America, where it manufactures plasterboard for dry lining in partnership with the French materials producer.

Lafarge chairman and CEO Bruno Lafont said the sale would unlock immediate value for the group while allowing the company to participate in the new entity's future success.

The news comes after Lafarge agreed in May to sell parts of its cement and concrete business in the US to Colombian cement maker Cementos Argos for US$ 750 million.