USG Corp. has agreed to be acquired by Germany’s Gebr. Knauf KG for $7 billion, capping months of deal talks between the two building-materials firms and USG’s largest investor, Warren Buffett’s Berkshire Hathaway Inc. BRK.B 0.11%
Under the deal announced Monday, Knauf will pay USG shareholders $43.50 a share in cash. Shareholders would also receive a 50-cent-a-share special dividend after they approve the transaction.
Knauf, which already owns a 10.5% stake in USG, has been courting USG for months with the backing of Berkshire Hathaway, which owns about 31% of the Chicago-based company After its earlier offer of $40.10 a share was rebuffed last year, Knauf returned in March with a bid of $42 a share. At the time, USG said the offer substantially undervalued the company and analysts speculated that Knauf would likely raise the offer.
Knauf and Berkshire Hathaway in recent months increased pressure on USG to agree to a deal. Shareholders last month voted against re-electing three directors and a fourth company-backed board nominee.
In prepared remarks, USG Chief Executive Jennifer Scanlon said the board “has worked diligently to evaluate all strategic options to maximize value.”
The transaction is expected to close in early 2019.
Shares in USG rose nearly 4% in recent trading.