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James Li
James Li
Articles (585)  | Author's Website |

Knauf Announces Merger With Buffett’s USG

The conglomerate agrees to vote for the merger

June 11, 2018 | About:

Gebr. Knauf KG and Warren Buffett (Trades, Portfolio) target USG Corp. (NYSE:USG) announced on Monday that it entered a definitive merger agreement in which Knauf will acquire all outstanding shares of USG for approximately $7 billion.

Per the merger terms, USG shareholders will receive $44 per share, which includes $43.50 per share payable at merger close and a special dividend of 50 cents per share following shareholder approval of the merger.

Management discuss strategic rationale for the merger

General Partners Alexander Knauf and Manfred Grundke said the partnership intends to “make significant investments in USG’s operations and its people.” Knauf, a long-term USG shareholder, said the partnership admires the company’s strong brands and “top positions in North American wallboard and ceilings.”

USG CEO Jenny Scanlon said the merger with Knauf will “create new opportunities” for customers and integrate the USG’s employees into a “global building products company.” Scanlon mentioned in her letter that while it is hard to predict when the merger will close, the company expects to complete the transaction in early 2019 subject to the receipt of shareholder and regulatory approvals.

Buffett’s conglomerate agrees to support the merger

Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) announced on Sunday that it agreed to vote its shares in favor of the merger according to its Schedule 13-D filing with the Securities and Exchange Commission. More specifically, the conglomerate agreed to “vote all the subject shares” for the transaction at the stockholders meeting, making sure that 100% of the shareholders are present to vote.

Berkshire disclosed that the 43,387,980 shares are subject to the voting agreement. Knauf might have acquired “beneficial ownership” of the shares and the shared power to vote according to the filing. Despite this, Knauf disclaimed this ownership in the partnership’s filing.

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Disclosure: No positions.

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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