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Highlights
- 26% premium offered in cash and stock deal
- Combined sales expected to reach $5.9 billion
- Strategic push into outdoor living and U.S. markets
James Hardie (ASX:JHX), a global leader in fiber cement building products, has announced a definitive agreement to acquire The AZEK Company (NYSE:AZEK), a prominent player in outdoor living solutions. The transaction, valued at approximately $5.8 billion, will be structured as a mix of cash and stock. This major acquisition adds to the growing momentum on the ASX, which continues to see robust activity across sectors, including strong performances from ASX mining stocks.
AZEK shareholders will receive $26.45 in cash and 1.0340 James Hardie ordinary shares for each AZEK share they hold. This reflects a total consideration of $56.88 per share—a 26% premium over AZEK’s recent trading levels and a 21% premium over its 60-day volume-weighted average price leading up to March 21, 2025.
Following the completion of the transaction, James Hardie shareholders are expected to own around 74% of the combined entity, while AZEK shareholders will hold the remaining 26%.
The strategic rationale behind this acquisition centers on enhancing the combined company’s position in the building materials sector. Together, the two firms will command net sales of approximately $5.9 billion and an adjusted EBITDA of $1.8 billion, translating into a healthy margin of 31%. Notably, the merged business is expected to generate over $1 billion in annual free cash flow, supported by both cost and commercial synergies.
This move is aimed at creating a leading platform for growth across the building products industry. James Hardie brings expertise in fiber cement exteriors, while AZEK adds strong capabilities in composite decking, railing, and other outdoor living products. The integration of both companies’ product lines is expected to appeal to a broader customer base in both the repair & remodel and new construction markets.
The boards of both James Hardie and AZEK have unanimously approved the deal. The acquisition is targeted for completion in the second half of 2025, pending regulatory approvals and a shareholder vote from AZEK. James Hardie has already secured full financing commitments to support the transaction.
A disciplined integration process is planned to capture the projected synergies by 2028. The combined company will retain its listing on the ASX, with intentions to enhance its U.S. market visibility through a NYSE listing. Leadership will remain under James Hardie’s current CEO and CFO, with additions to the board post-merger to reflect the combined vision.
