USG Corp. (NYSE: USG), Chicago, IL, and Boral Limited (ASX: BLD), Sydney, Australia, have formed a 50/50 strategic joint venture, USG Boral Building Products, with sales and operations across Asia, Australasia and the Middle East.

In connection with the joint venture, Boral contributed its Gypsum division, which includes its plasterboard operations in Australia and Asia, and USG contributed its Asian and Middle Eastern businesses, as well as exclusive access in the joint venture’s territory to its ceilings, cement board, fiber board, and lightweight plasterboard and joint compound building products technologies.

As consideration for its 50-percent ownership in the joint venture, in addition to contributing its Asian and Middle Eastern businesses and certain intellectual property, USG made a cash payment of US$500 million to Boral. Boral will also have the opportunity for up to US$75 million in earn out payments over five years if the joint venture achieves specific performance targets.

"The joint venture gives USG an immediate, significant presence across some of the fastest growing construction markets in the world, and positions both USG and Boral to win over the long-term in Asia, Australasia, and the Middle East," USG President and CEO Jim Metcalf said.

"The joint venture aligns with Boral’s goal to grow earnings from Asia and to transform the business over the longer-term through innovative product and manufacturing solutions," said Boral CEO Mike Kane.

Management of the joint venture will be shared between Boral and USG with Frederic de Rougemont from Boral as CEO and Paul Monzella from USG as CFO.