Gebr. Knauf Verwaltungsgesellschaft KG (‘Knauf‘) made an unsolicited and non-binding proposal to acquire the remaining 89.54% stake in USG Corporation (NYSE:USG) from Berkshire Hathaway Inc. (NYSE:BRK.A) (‘Berkshire') and other shareholders for $5.1 billion on November 28, 2017. Knauf will pay $40.1 per USG share as consideration under the offer. On December 20, 2017, the USG Board determined that it was not in the interest of its stockholders to enter into discussions with Knauf regarding its proposal. On March 15, 2018, Knauf made a revised proposal to acquire USG for a revised price of $5.37 billion or $42 per share in cash. In connection with the offer, Berkshire and its related entities proposed to grant Knauf an option to purchase all of shares of USG common stock held by Berkshire, subject to legal review. The option exercise price per share was proposed by Berkshire to be the price per share paid to such other holders of common stock of USG by Knauf, less the option purchase price of $2 per share to be paid to Berkshire and its related entities upon entering into a definitive option agreement. The option would have a term of approximately 6 months. The USG Board, advised by its financial and legal advisors, unanimously rejected the revised offer on March 26, 2018 stating that the offer substantially undervalued USG and that it was not in the best interests of all of USG's shareholders. On June 10, 2018, Knauf entered into a definitive agreement to acquire remaining 89.4% stake that it does not already own in USG Corporation (NYSE:USG) from Berkshire Hathaway Inc. (NYSE:BRK.A) (‘Berkshire') and other shareholders for $5.5 billion. Knauf will pay $43.5 per share merger consideration. The market share unit, restricted stock unit and performance shareholders will receive the same per share consideration. The option shareholders will be paid per share merger consideration of $43.5 that is in excess of the exercise price.

Knauf expects to finance the purchase (and any USG debt to be refinanced) from existing corporate funds and additional bank borrowings of up to $4 billion to be raised with assistance from Morgan Stanley. Knauf has obtained debt financing commitments for the financing necessary to complete the transaction. On June 8, 2018, Commerzbank Aktiengesellschaft and UniCredit Bank AG have each agreed to arrange, manage and underwrite the financing in the amount of €2.25 billion ($2.8 billion) term credit facility, €500 million ($622.2 million) revolving credit facility, $800 million term credit facility and $858.5 million backstop credit facility. The aggregate proceeds from the foregoing credit facilities, together with other available capital resources of Knauf, will be sufficient to fund the transaction. Upon completion, USG will become a wholly owned subsidiary of Knauf. In case of termination, USG will pay a termination fee of $215 million.

USG Corporation President and Chief Executive Officer Jennifer F. Scanlon today announced that she intends to leave USG upon, and subject to, the completion of the pending merger. Jennifer F. Scanlon will continue to serve as President and Chief Executive Officer until closing, continuing to focus on executing USG's business plans and strategies, and ensuring a smooth transition for USG's employees, customers and other stakeholders. Following the close of the transaction, USG will continue to be managed locally in the United States. Knauf intends to maintain USG's existing corporate headquarters in Chicago as well as its facilities in North America. The transaction is not subject to any financing condition. Entry into a definitive transaction would be subject to customary terms and conditions, including: (a) completion of satisfactory due diligence, (b) negotiation of mutually acceptable definitive agreements and (c) approval by the parties' respective Boards of Directors of the final terms and conditions of the transaction. The completion of the transaction is expected to be subject to customary closing conditions including regulatory, anti-trust and approval from at least 80% of USG shareholder. The transaction has been unanimously approved by USG's Board. The deal is also approved by the shareholders' committee of Knauf. Berkshire Hathaway has agreed to vote its shares in favor of the transaction. As of May 1, 2018, USG Board authorized negotiations with Knauf. The transaction received anti-trust approval on July 11 following the early expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. As of September 26, 2018, the transaction was approved by the stockholders of USG Corporation. As of February 11, 2019, the Competition and Consumer Commission of Singapore (CCCS) has cleared the proposed acquisition. As on March 28, 2019, the transaction was conditionally approved by Australian Competition and Consumer Commission after accepting a court-enforceable undertaking from Knauf to divest assets. The Commerce Commission of New Zealand granted clearance to the deal on April 18, 2019 with the condition that Knauf divest USG's interest in USG Boral, either entirely or just in Australasia, to a buyer approved by the Commission. As of April 18, 2019, the transaction has received all required regulatory approval and clearances necessary for the closing of the transaction. The transaction is expected to close in early 2019 and may terminate if not consummated by January 1, 2019. As of April 18, 2019, the transaction is expected to close on April 24, 2019.

J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC acted as financial advisors to USG, and James Dougherty, Timothy Melton, Lizanne Thomas, Erin de la Mare, Ryan Thomas, Carsten Gromotke, Prudence Smith, Peter Wang, Yizhe Zhang, Gabriel Altamirano, Sushma Jobanputra, Nicole Gebauer and Tanja Neumann of Jones Day acted as legal advisors to USG. Morgan Stanley Bank AG acted as financial advisor, Martin Klusmann, Tobias Pukropski, Katharina Gebauer and Christoph Hinrichsen of Freshfields Bruckhaus Deringer LLP and Oliver Socher, Kathrin Marchant, Thomas Hughes, David Holland, Garry Jaunal, Thomas May, Tatyana Johnson, Maura McBreen, Ryan Vann, Gavin Bushell, Raymundo Enriquez, Brian Burke, Mark Hamer, Rod Hunter, John Watson, Debra Dandeneau, Jon Ebner, Heiko Burow, Robert Dolehide, Sarah Roughead, Jimmie Covington, Sara Ahmed, Lewis Sutton, Silke Fritz, Astrit Rexhaj, John Lawlor, Michael Reed, Lauren Schuster, Sophia Real, Jessica Wicha, Matthew Andonian and Craig Roeder of Baker & McKenzie, Robert Masella, Grace Jamgochian, Alan Goudiss, Lona Nallengara, John Cannon, David Higbee, Ethan Harris, Ronan Wicks, Dillon Smith, Matthew Behrens, Sean Dougherty, Stephanie Greco, Frank Oliver and Eric Grosshandler of Shearman & Sterling LLP acted as legal advisors and PricewaterhouseCoopers acted as accounting and tax advisor to Knauf. Robert E. Denham and Judith T. Kitano of Munger, Tolles & Olson LLP acted as legal advisors to Berkshire and USG. Scott Winter and Jonathan Salzberger of Innisfree M&A Incorporated and MacKenzie Partners, Inc. acted as proxy solicitors to Knauf. Innisfree will receive a fee not to exceed $0.6 million. MacKenzie Partners will receive an initial retainer of $0.06 million and additional quarterly retainers of $0.015 million payable commencing June 30, 2018. Computershare Trust Company N.A. acted as the transfer agent for USG. D.F. King & Co., Inc. will receive a fee of approximately $0.25 million. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are expected to be paid fee of $31 million each on consummation of the transaction.

Gebr. Knauf Verwaltungsgesellschaft KG (‘Knauf‘) completed the acquisition of remaining 89.54% stake in USG Corporation (NYSE:USG) from Berkshire Hathaway Inc. (NYSE:BRK.A) (‘Berkshire') and other shareholders on April 24, 2019.