As part of its strategy of investing in growing European building materials businesses, BPB announces that agreements have been reached to:

• acquire from the Etex Group ownership and management control of its plasterboard and plasters business in Belgium and the Netherlands through the purchase of an additional 53% stake in Gyproc Benelux NV ("Gyproc"), for a cash consideration of €83.5 million (£52.2 million) and the assumption of approximately €25 million (£15.5 million) of debt, and
  
• sell Gyproc’s German and Polish plasterboard businesses to Lafarge for €53 million (£33.1 million) in cash on a debt-free basis.

BPB’s further investment in Gyproc will increase its equity participation from 46% to 99% and provide the group with a strong market position in the Low Countries, together with a manufacturing presence in Belgium which fits very well with BPB’s European plant network. The retained businesses employ some 375 people and in the year to 31 December 2001 reported a small operating loss on turnover of around €90 million (£56 million).

The decision to sell Gyproc’s German and Polish subsidiaries reflects the fact that BPB already has substantial businesses in that region, with sufficient manufacturing capacity to meet current and anticipated demand.

Both acquisition and disposal transactions are subject to relevant national regulatory approvals, with completion expected within the next six months. BPB would then subsequently seek to acquire the remaining 1% minority interest in Gyproc.

Gyproc was established in 1957 as a joint venture to develop the use of plasterboard in the markets for dry-lining construction systems in the Low Countries and Germany. The majority owner’s decision to exit the industry enables BPB to enhance its trading position in the Dutch and Belgian markets, with significant integration opportunities for improving customer service and plant operating efficiencies.

Commenting on the transactions, Richard Cousins, BPB’s Chief Executive said:

"These back-to-back deals represent an attractive opportunity for BPB and will improve the customer offering from our market leading European business platform. We expect the retained Gyproc businesses to be earnings enhancing in fiscal 2003/04."

• BPB is the world leader in the supply of plasterboard and gypsum plasters, and a major supplier of insulation, ceiling tiles and related products for internal linings, serving growing markets for building systems in over 50 countries.
  
• Ahead of the announcement of the group’s interim results and dividend for the six months to 30 September 2002, due on 28 November, BPB published a trading update on 19 September which reported a first half expectation for underlying profit before tax (before goodwill and exceptional items) of around £95 million, up approximately 33% on the corresponding period and continuing the recovery trend first reported last November.
  
• BPB accounts for its current 46% stake in Gyproc Benelux NV on an equity basis as an associate.