The USG board approved the $44-a-share offer from its Iphofen-based rival, after it bowed to pressure to pursue a deal from influential shareholder advisory groups as well as one of its largest stockholders: Warren Buffett’s Berkshire Hathaway.
The US company, which makes drywall and ceiling panels, publicly spurned a $42-a-share offer from privately held Knauf in March. USG chairman Steven Leer had called that offer “wholly inadequate”.
The two groups said Berkshire Hathaway, which owns more than a 30 per cent stake in USG, would vote its shares in favour of the deal. Mr Buffett publicly broke with USG management earlier this year. Berkshire said at the time it would oppose the election of four board nominees supported by USG management in an attempt to push the company to the negotiating table.
In May, USG agreed to open its books to Knauf and resume talks on a potential deal.
“Our board has worked diligently to evaluate all strategic options to maximise value for our shareholders, and we are pleased to have reached this agreement which provides our shareholders with significant and certain cash value,” USG chief executive Jennifer Scanlon said.
USG stockholders will receive $43.50 a share when the deal is completed. A 50 cent special dividend will be paid following shareholder approval for the takeover.
Knauf expects to complete its takeover of USG by early 2019 and has committed debt financing in place. The German group received financial advice from Morgan Stanley. JPMorgan and Goldman Sachs advised USG.
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