leader in building materials systems and composite solutions, Owens Corning, today
announced the signing of a definitive agreement under which Owens Corning will
acquire Saint-Gobain''s reinforcement and composites business for $640 million.
further strengthens Owens Corning''s position as a market leader in glass reinforcements
and composites as the acquired business comprises 20 plants, which includes 12
glass fibre reinforcements plants, six fabrics plants and two plants that produce
both reinforcements and fabrics. The Wichita Falls, Texas, facility of Saint-Gobain
is not part of the transaction.
2006, the acquired Saint-Gobain reinforcement and composites business had sales
of approximately $900 million, and approximately 4,500 employees. With this acquisition,
the expanded Owens Corning composite solutions business will have 42 production
facilities in 16 countries.
would have translated to about 9,000 employees and combined sales of approximately
$2.2 billion on a pro forma basis in calendar year 2006 for the new Owens Corning
composite solutions segment, compared with actual reported segment sales in 2006
of $1.6 billion.
transaction is expected to close by the end of 2007 and remains subject to regulatory
approval in several jurisdictions, along with customary closing conditions. Owens
Corning will divest its facilities in Battice, Belgium; Birkeland, Norway; and
Huntingdon, Penn, in order to address regulatory concerns related to the transaction.
The Wichita Falls, Texas, facility of Saint-Gobain is not part of the transaction.
is a transformational acquisition for Owens Corning," said Dave Brown, Owens
Corning president and chief executive officer. "This acquisition expands
Owens Corning''s footprint around the world and strengthens our position in key
markets such as Russia, China, India, Mexico and Brazil. It also brings talented
people and proven technology to Owens Corning, and it balances our exposure to
the cyclical downturns associated with the residential construction market in
North America. Composite solutions is a core business at Owens Corning and we
are committed to its continued growth."
fibre markets are global, diverse and growing at two-times global GDP," said
Mike Thaman, Owens Corning chairman and chief financial officer. "This strategic
acquisition extends our global reach to commercial and industrial markets of interest
and expands our global presence in a capital- efficient way that adds near- and
long-term value to shareholders."
Dana, the president of Owens Corning composite solutions business, said, "This
acquisition will accelerate the ability of Owens Corning to grow with our customers
in both developed and high-growth emerging markets. Customers will benefit from
an expanded product range, world-class applied materials technology, improved
logistics and supply capability. Moreover, Owens Corning will own a growing global
of the acquisition to Owens Corning:
the Composite Solutions business strategy and timetable to improve financial performance
of that business, while providing greater economic value to Owens Corning. Substantial
synergies are expected and will be further detailed in Owens Corning''s 1 August
announcement of second quarter 2007 business results
Owens Corning''s presence in fast-growing emerging markets around the world, increasing
the share of Owens Corning revenue from international, commercial and industrial
sources, while adding balance the company''s revenue sources
Profitably grows the company''s global exposure to non-residential markets and
positions the Owens Corning brand in markets where the ompany does not have a
building materials presence
Simplifies the management and governance structure compared with the previously
proposed 60:40 joint venture structure, while speeding the integration process
with greater clarity for employees of both organisations.
Under the terms of the transaction, which has been approved by
the board of directors of both companies, Owens Corning will acquire Saint-Gobain''s
Reinforcement and Composites business for $640 million.
acquisition, net of the planned divestitures, increases Owens Corning''s installed
glass fibre manufacturing capacity in the composite solutions segment by 500,000
tons, bringing the company''s combined installed capacity to 1.3 million tons annually,
25 per cent of which is in developing countries and emerging markets.
transaction includes the acquisition of a specialty fabrics business that is complementary
to and provides geographic expansion for Owens Corning''s existing fabrics business.
includes weaving and knitting operations of glass fiber. These woven and knit
fibers are then used to produce composite products that provide strength, flexibility
and durability in the wind energy, marine, industrial, automotive and piping markets.
This fabrics business also will provide innovative materials technology for markets
including solar panels, ballistics and carbon fiber products.
acquired business currently leases certain metals used in its production tooling.
At current market prices, the leased metals would be valued at approximately $320
million. On an ongoing basis, Owens Corning expects to meet its requirements for
such leased metals from a variety of sources, which could include existing Owens
Corning tooling, purchase, lease or some combination.
Corning anticipates substantial annual pre-tax cost synergies, which will be further
detailed in the company''s Aug. 1 announcement of second quarter 2007 business
results. Synergies will primarily come from reduced operating costs, improved
energy efficiency in furnaces and sourcing.
acquisition will be funded by a combination of proceeds of previously announced
divestitures, cash on hand, cash flow from operations, and Owens Corning''s existing
acted as exclusive financial advisor to the company for the transaction.
expanded organistion will become part of the existing Owens Corning Composite
segment, which will continue to be led by Chuck Dana, currently president of Owens
Corning''s Composite Solutions business.