Boral has entered into an agreement with a Western Australian Consortium to sell its Midland Brick business for $86 million.
The consortium, made up for Linc Property, Birchmead (part of the CFC Group) and Fini Group, will also gain around 800 hectares of associated landholdings as part of the deal.
Boral will use the processed to reduce debt and fund strategic growth opportunities.
Boral’s CEO & Managing Director, Mike Kane, said that the sale was consistent with the Boral’s strategy of focusing on construction materials in Australia and reducing exposure to bricks globally.
“Our focus in Australia has been to continue to invest in our leading integrated construction materials business, where we supply materials to residential, commercial and infrastructure building and construction markets across all states and territories,” Kane said.
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“Having divested our 40 per cent stake in the CSR Boral Bricks joint venture in 2016, the sale of Midland Brick completes our exit from bricks in Australia, for combined proceeds of around $215 million over the past three years.
“We have owned and operated Midland Brick for close to 30 years and we recognise and value the contribution the business has made to the Boral Group over that time. We also recognise the iconic and much-loved position that the Midland Brick Company has had in WA for 73 years. We are confident that this change of ownership will strengthen Midland Brick’s prospects for the future, which is great news for customers and our local staff.”
The new owners intend to focus on strengthening Midland Brick’s position as a locally owned business serving the WA building industry.
Surplus land is expected to undergo redevelopment to help Midland Brick reduce its operational footprint and improve the local amenity.
The transaction is expected to close by the end of 2019 or soon after, and is subject to a number of customary pre-closing conditions.