Not even this could stop the Boral (ASX:BLD) share price tumbling lower

The Boral Limited (ASX:BLD) share price dropped lower on Friday despite the release of a positive announcement…

| More on:
finger selecting sad face from choice of happy, sad and neutral faces on screen, indicating a falling share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Boral Limited (ASX: BLD) share price was out of form on Friday and dropped lower with the rest of the share market.

Not even a late announcement could stop the building materials company's shares from falling 2% to $4.82.

What did Boral announce?

This afternoon Boral announced that together with its joint venture partner, an affiliate of Lone Star Funds, it has agreed to sell the North American based Meridian Brick business to Wienerberger.

According to the release, the parties have agreed a consideration of US$250 million, which remains subject to customary adjustments. This equates to US$125 million for Boral's 50% share, prior to any adjustments.

Subject to exchange rates and final adjustments, the company is expecting to report a small pre-tax accounting profit on sale of approximately A$10 million at closing.

Though, it has warned that the transaction is subject to various closing conditions and regulatory approvals. If all goes to plan, the parties are targeting completion in FY 2021.

Goodbye bricks.

The sale of the Meridian Brick business is the final step in Boral's exit from brick operations globally.

Boral's CEO and Managing Director, Zlatko Todorcevski, commented: "In recent years Boral has divested its interest in bricks in Australia and since forming the bricks joint venture in the US with Lone Star in 2016, the plan was to ultimately prepare the business for sale."

"As part of this process, Meridian's leadership was refreshed with the appointment of a new CEO in December 2018, and a stronger focus on improving performance," he added.

Mr Todorcevski believes that Boral has received is a good price for the business and that it "reflects its improved performance."

What now?

The CEO expects the divestment to allow the company to focus on improving the performance of other areas of the business.

"The divestment of Meridian is a further step in Boral's portfolio review works. It helps to streamline our US business and allows us to further focus on the improvement initiatives underway in the remaining businesses in Boral North America," he concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why ALS, Black Cat, Boss Energy, and Soul Patts shares are falling today

These shares are falling on Thursday. Let's find out why.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why ALS, Fisher & Paykel Healthcare, IPD, and Predictive Discovery shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A man looks down with fright as he falls towards the ground.
Share Fallers

Why Aspen, Healius, Nufarm, and Propel shares are falling today

These shares are having a tough session on Tuesday. But why?

Read more »

A worried man holds his head and look at his computer.
Share Fallers

Why Elders, James Hardie, Origin Energy, and SGH shares are falling today

These shares are starting the week in the red. But why?

Read more »

Bored man sitting at his desk with his laptop.
Share Fallers

Why Catalyst Metals, Duratec, Nufarm, and Rio Tinto shares are dropping today

These shares are ending the week in the red. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Dexus, Mayne Pharma, Nufarm, and Treasury Wine shares are falling today

These shares are having a tough session on Thursday. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why James Hardie, Mayne Pharma, Nufarm, and Resimac shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Kogan, Monash IVF, OFX, and ResMed shares are falling today

Why are these shares taking a tumble today? Let's find out.

Read more »