European Commission Approves Proposed Sale of Armstrong World Industries
Armstrong World Industries announced the conditional clearance by the European Commission of the Company’s previously announced sale of certain subsidiaries comprising its EMEA and Pacific Rim businesses, including the businesses of the WAVE joint venture in EMEA and the Pacific Rim, as well as Armstrong France and WAVE France, to Knauf International GmbH (“Knauf”).
Following its Phase I investigation, the European Commission concluded that the transaction, as modified by the commitments offered by Knauf, does not raise any competition concerns. The commitments are intended to address concerns regarding the overlap between the activities of AWI and Knauf and include the divestment by Knauf to a third party of certain mineral fiber and grid businesses and operations of the Company in Austria, Estonia, Germany, Ireland, Italy, Latvia, Lithuania, Portugal, Spain, Turkey and the UK. This includes the sales operations in each of the relevant countries, and the production facilities of the Company and WAVE located in Team Valley, UK. The terms of the sale of the divestment business by Knauf and the identity of the purchaser are subject to the approval of the European Commission.
The Company now expects closing of the transaction to occur in the first half of 2019. As a result, the Company expects to pay approximately $35 million of additional cash taxes in fiscal 2018 due to the timing of the previously received non-refundable purchase price from Knauf. The Company expects to recoup all or substantially all of such taxes following closing in fiscal 2019. The conditional clearance and related divestiture commitments by Knauf do not have any impact on the transaction purchase price.