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Lafarge sells its Australian gypsum business

World Cement,

Lafarge has announced the sale of its Australian gypsum operations to Knauf for net proceeds of €120 million.

Lafarge’s Australian gypsum business represents two manufacturing facilities for gypsum wallboard and other compounds, along with a national network of distribution and retail centres. In 2010, Lafarge’s Australian operations generated EBITDA of €13 million. The deal is expected to be completed in the third quarter of 2011.

The news follows a recent announcement that that company has entered into exclusive negotiations with Etex Group for the sale of its European and South American gypsum assets at an enterprise value of €1 billion. Under this proposed agreement, Lafarge would receive net cash proceeds of approximately €850 million and in addition would receive a 20% interest in the new partnership, which would combine the European and South American gypsum activities of both groups.

Lafarge’s European and South American gypsum division manufactures gypsum wallboard and other gypsum-based products such as plaster, joint compounds and plaster blocks. In 2010, Lafarge’s European and South American gypsum operations generated consolidated sales of €895 million.

Lafarge is selling assets as part of its plan to cut its debt by €2 billion. It is reported that the company also plans to reduce its debt by cutting its dividend and other cash outlays.

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