A $US7 billion deal involving a large Germany private company Knauf and the US listed USG is set to spill over into Australia.

USG Corp has finally accepted a $US7 billion bid from German building materials company Gebr Knauf after months of talks between the pair.

USG is Boral’s joint venture partner in its Asia Pacific plasterboard business (USGBORAL), which is one of Boral’s biggest units in terms of revenue and earnings.

Boral has pre-emptive rights over USG’s 50 per cent stake, which analysts say will be triggered by Knauf’s takeover.

“We see Boral buying either the 50% of the JV it does not own, or seeking a deal to consolidate the broader Knauf plasterboard interests in the region into the JV, maintaining the structure with Knauf as partner,” the analysts said in a flash note.

“There are a few things to occur now, most pertinently among them for Boral to negotiate a possible deal for Knauf to sell its Asia-Pac assets into the JV. Then would follow a process of asset sales and the complexity of dealing with the resultant Australian plasterboard market structure that will likely require some optimisation.”

Source AFR 12June18