Lafarge sells Australian gypsum business to Germany’s Knauf for €120 million

Lafarge, the world's largest cement maker, today sold its Australian gypsum business to privately-owned German rival Knauf Group for €120 million ($172 million).

The sale comes barely after a week after the Paris-based company entered into exclusive negotiations with Belgium's Etex Group for the sale of its European and South American gypsum operations, for €1 billion ($1.41 billion). (See: Lafarge to sell European and South American gypsum assets to Etex for $1.41 bln)

Lafarge's Australian Gypsum business has two manufacturing facilities for gypsum wallboard and other compounds along with a national network of distribution and retail centers. In 2010, its Australian operations generated EBITDA of €13 million, said Lafarge.

Family-owned Knauf is a leading manufacturer of building materials with more than 150 production sites worldwide. The Iphofen, Germany-based group had a turnover of more than €5 billion last year.

Lafarge, which posted sales of €16.2 billion in 2010, is a global producer of building materials including cement, aggregates and concrete, and gypsum.

Lafarge has recently been selling some of its assets in North America to cut debt by €2 billion with an aim to divest at least €750 million this year. The group had net debt of €14.24 billion at the end of March 2011, most of which was incurred to fund the €8.8 billion acquisition of Egypt's Orascom Cement in 2007.

But the 178 year-old company has been looking to expand in emerging nations, and last week, The Times of India reported that Lafarge and Switzerland's Holcim is in talks with Madras Cements, part of Chennai-based Ramco Group, to buy its cement grinding unit in West Bengal for around Rs350 crore. (See: Madras Cements in talks with Lafarge, Holcim to sell West Bengal unit)