Owens Corning divests glass business for $755 million

Owens Corning (NYSE:OC), a global building and industrial materials leader with a market capitalization of $15.27 billion and a "GOOD" financial health rating according to InvestingPro, has announced the sale of its glass reinforcements business for an enterprise value of $755 million.

The divestiture, part of a definitive agreement with Triumph Non-Ionics Pvt Ltd. and 3B Lux S.à.r.l, both affiliates of the Praana Group, is expected to conclude within 2025, subject to customary regulatory approvals and conditions.

The transaction will see Owens Corning parting with a significant portion of its Composites business segment. The company anticipates recording an impairment charge due to the sale, the exact amount of which is currently indeterminable and will be disclosed in an amended report.

Marcio A. Sandri will continue as President of Composites but will step down as an executive officer of Owens Corning, effective February 13, 2025. The company's leadership changes and strategic realignments reflect its focus on core business areas.

Owens Corning expects to receive after-tax net proceeds of approximately $360 million from the deal, including $225 million in promissory notes issued by the purchasers. An estimated $100 million is also anticipated from the sale of excess metal alloy post-transaction. The proceeds are earmarked for growth investments and shareholder returns through share repurchases and dividends.

As a result of the divestiture, Owens Corning will integrate its glass nonwovens business, which supports its Roofing business, into the Roofing business segment. The Composites business segment will be dissolved, and financial reporting will reflect these changes starting with the quarterly report for the period ending March 31, 2025.

The company's strategic decision to sell its glass reinforcements business aligns with its capital allocation strategy, focusing on organic investments and returning cash to shareholders. This move is part of Owens Corning's broader effort to streamline its operations and concentrate on its core businesses.

This report is based on a press release statement and contains forward-looking statements subject to risks and uncertainties. The final outcome of the transaction and the financial impacts are contingent on various factors, including regulatory approvals and the successful separation of the business unit from Owens Corning's retained businesses.

For investors seeking deeper insights, InvestingPro offers comprehensive analysis through its Pro Research Report, which includes detailed financial metrics, 8 additional ProTips, and expert analysis of Owens Corning's market position and growth potential.

In other recent news, Owens Corning has made several significant announcements. The company has unveiled plans to invest in a new shingle manufacturing facility in the southeastern United States. The upcoming facility, projected to produce approximately six million squares of shingles annually, is part of Owens Corning's broader strategy to increase shingle capacity and is expected to generate nearly 100 skilled manufacturing jobs.

Fitch Ratings has upgraded Owens Corning's ratings to 'BBB+' from 'BBB', reflecting the company's improved business profile and deleveraging following its $3.9 billion acquisition of Masonite International (NYSE:DOOR) Corporation. The company is also considering strategic alternatives for its global glass reinforcements business, which generates about $1.3 billion of annual revenues.

Owens Corning has announced a 15% increase in its quarterly cash dividend, demonstrating its commitment to delivering shareholder value. The company's Board of Directors has expanded with the appointment of Michelle T. Collins, a former audit partner at Deloitte & Touche LLP.

Concurrently, it was announced that W. Howard Morris, a current director, has decided not to stand for re-election at the 2025 Annual Meeting of Stockholders.

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