CSR Limited (CSR) and Boral Limited (Boral) welcome today’s announcement from the Australian Competition and Consumer Commission (ACCC) that it will not oppose the joint venture to combine their brick operations located on the east coast of Australia. Click here to view a copy of the ACCC press release.
The proposed joint venture, which was announced on 4 April 2014, will be owned 60% by CSR and 40% by Boral reflecting the relative valuation of the two businesses. There is no cash consideration as part of the proposed joint venture.
Boral’s CEO & Managing Director, Mike Kane said: “We are very pleased with the ACCC’s decision to allow our east coast bricks joint venture to proceed. This is good news for customers, employees and shareholders. With Australian brick manufacturing being challenged as a result of a reduction in brick usage and high input costs, the joint venture will allow us to drive efficiencies across the combined network of operations, creating a more sustainable business.”
CSR’s CEO & Managing Director, Rob Sindel added: “This joint venture is about retaining manufacturing in Australia and maintaining clay bricks as a choice for consumers. It will strengthen opportunities for employees and ensure that customers benefit from a strong supplier in the highly competitive cladding market in Australia”.
With combined revenue in the order of $230 million, initial overhead savings of $7-$10 million per annum are expected following the formation of the joint venture and integration of the businesses.
Approval from the ACCC was the major condition to finalising the transaction. With the review process now complete, the businesses can progress the remaining administrative and contractual issues for formation of the joint venture. Integration planning, which is already under way, can also be accelerated. The formation of the joint venture is expected to be completed in the first half of calendar year 2015.