Lafarge to sell North American gypsum unit to PE firm Lone Star for $700 mn

French cement giant Lafarge yesterday agreed to sell its North American gypsum unit to private equity firm Lone Star for $700 million as part of its plan to divest non-core assets and reduce debt.

Lafarge North America's gypsum division manufactures gypsum wallboards and joint compounds throughout a network of plants located in the US and Canada.

In 2012, these operations generated sales of $310 million.

Lafarge will continue to hold a 20-per cent stake in the JV created with Belgium's Etex Group, which combined the European and South American assets of both groups.

Lafarge, the world's largest cement maker said after sale it would focus on its core businesses, cement, aggregates and ready-mix concrete.

The sale comes two years after the Paris-based company sold its Australian gypsum business to privately-owned German rival Knauf Group for $172 million.

Lafarge, which posted sales of €15.8 billion in 2012, is a global producer of building materials including cement, aggregates and concrete, and gypsum.

Lafarge had said in May that it will cut net debt below €10 billion ($13 billion) towards the second half of the year as it sheds assets and caps spending.

But the 178 year-old company, which had incurred most of its debt to fund its €8.8 billion acquisition of Egypt's Orascom Cement in 2007, has been seeking to expand in emerging nations, especially in China, India, the Philippines and Malaysia.