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04/29/2020

Merger leading to leadership shakeup at USG

USG Corporation President and CEO Jennifer Scanlon will leave the company once its pending merger Gebr. Knauf KG (Knauf) is completed.

The merger is also expected to lead to a mass exit of USG’s executive team, the Chicago-based building products manufacturer said.

Scanlon will continue to serve as president and CEO 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,” the company said in a prepared statement. Scanlon became USG’s president and CEO on Nov. 1, 2016.

Last September, shareholders of USG approved a $7 billion merger with German building materials manufacturer Knauf.

USG President and CEO Jennifer Scanlon.

“It has been a great privilege to serve as President and CEO of USG, and I am very proud of the work done by the USG team to align our strategy with customer needs and accelerate innovation,” Scanlon said. “Our shareholders will realize significant and certain cash value upon the closing of the merger, and our employees and customers will benefit from the creation of a global building materials leader that will leverage two highly complementary businesses to better meet the needs of our customers. Until the closing it’s business as usual at USG. Following the closing, I will continue to advocate for innovation in the construction industry and promote STEM education to expand opportunities for talented students in manufacturing.”

Scanlon initially stated that she was opposed to the merger with Knauf but pressure from shareholders eventually lead to agreement being reached. Scanlon served in leadership roles at USG for 16 years and established the USG Boral Building Products joint venture and the divestiture of L&W Supply Corporation.

“Jenny became President and CEO at a time of significant change for our business, refocusing the company on growth and innovation, and building a strong team. On behalf of the USG Board of Directors, I would like to thank Jenny for her strong leadership and extraordinary contributions to the success of our Company,” said Steven Leer, chairman of the USG Board of Directors.

In addition to Scanlon, USG said that it anticipates several other members of the executive team will depart the company once the merger is completed. Departing executives include Matthew Hilzinger, executive vice president and CFO; Brian Cook, EVP and chief administrative officer; Dominic Dannessa, EVP and chief customer and innovation officer; Gregory Salah, SVP and president, gypsum; and Michelle Warren, SVP, general counsel and corporate secretary.

“We thank these talented executives for their leadership and for their service to USG, our customers and employees,” said Leer.

The merger is expected to be completed in early 2019. Until then, Knauf and USG will continue to run as separate companies.

In October, USG reported third quarter sales of $851 million, a 7% increase over the same quarter last year. But rising costs of materials and transportation hurt its net income, which was down 11% to $59 million.

For more information, visit USG's web page here.