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Boral (ASX:BLD) evaluates potential sale of flailing U.S. fly ash business
Source: David Gray/Reuters
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  • As part of a detailed review, construction materials giant Boral (BLD) has said it is assessing a variety of options regarding its struggling U.S. fly ash business
  • These include the formation of a joint venture or strategic alliance, an outright sale of the business and continued ownership
  • Boral became the largest supplier of fly ash in the U.S. after acquiring Headwater in 2017 for roughly $3.5 billion
  • However, a push for greener forms of energy generation has hamstrung the fly ash sector
  • That said, the company believes that new opportunities for supply could come from harvesting landfills, as well as imports and natural pozzolans
  • Boral remains steady at $5.98 per share

As part of a detailed review, construction materials giant Boral (BLD) has said it is assessing a variety of options regarding its struggling U.S. fly ash business.

These "value creation opportunities" include the formation of a joint venture or strategic alliance and an outright sale of the business. Continued ownership has also not been ruled out.

The move comes as the company looks to make an exit from the North American market, representing a drastic change from its global expansion plan that led to a hefty write down in 2020.

Boral became the largest supplier of fly ash in the U.S. after acquiring Headwater in 2017 for roughly $3.5 billion. However, the deal has since led to an impairment charge and reduced earnings as the market softened due to a greater global push for cleaner forms of energy generation.

"We have conducted a detailed study of the U.S. fly ash industry and remain confident in the long term demand dynamics for the industry, including significant incremental demand growth potential from the U.S. Government’s proposed new infrastructure program," said Zlatko Todorcevski, Managing Director and CEO of Boral.

Todorcevski was appointed in July last year — replacing Mike Kane, who retired in September — with a key mandate to review the company's U.S. business.

He said new opportunities for supply could come from harvesting landfills, as well as imports and natural pozzolans, which Boral expects will offset the decline in fresh fly ash supply as the U.S. transitions away from coal-fired power generation.

"As we continue to build our alternative supply strategy, strategic alliances and opportunities for partnership will be considered in parallel with divestment options or continued ownership," Todorcevski added.

Boral remains steady at $5.98 per share as of 3:01 pm AEST.

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