06:43 AM EDT, 03/24/2025 (MT Newswires) -- James Hardie Industries ( JHX ) agreed to acquire outdoor home products firm Azek ( AZEK ) in a cash and stock deal worth about $8.75 billion including debt as it looks to offer more exterior building options to homeowners and contractors.

Shareholders of Azek ( AZEK ) will receive $56.88 a share under the terms of the deal, including $26.45 in cash and 1.0340 ordinary shares of James Hardie to be listed on the New York Stock Exchange for each share they own in the firm. The offer is a 26% premium to Azek's ( AZEK ) volume-weighted average price over the 30 trading days before Friday, the companies said in a joint statement. The deal value includes roughly $386 million of debt.

Australian firm James Hardie makes exterior siding for homes, while Azek ( AZEK ), which is headquartered in Chicago, manufactures outdoor living products like cabanas and decking. The combined company is anticipated to increase its total addressable market in North America to $23 billion.

"The consumer journeys for siding and decking often overlap and both companies have excelled at demand creation for the homeowner and innovative products and solutions for the contractor," James Hardie Chief Executive Aaron Erter said in the statement.

James Hardie's US-listed stock dropped 11% in Monday's premarket activity, while Azek ( AZEK ) jumped 18%.

The deal, which requires approval from regulators and Azek's ( AZEK ) shareholders, is expected to be complete in the second half of this year. Stockholders of James Hardie and Azek ( AZEK ) will own roughly 74% and 26%, respectively, of the combined company.

"Given the substantial opportunity to drive synergies and James Hardie and Azek's ( AZEK ) shared discipline around operational efficiency, we expect to significantly enhance the combined company's profitability and cash flow," said Erter, who will head the combined firm. Chief Financial Officer Rachel Wilson will also stay in her role. Azek ( AZEK ) CEO Jesse Singh will join James Hardie's board.

The deal is expected to bolster James Hardie's cash earnings on a per-share basis in the first full year after completion. It's also set to for a growth rate of annual sales by more than 250 basis points over the next five years.

The tie-up is expected to bring at least $350 million of annual additional adjusted earnings before interest, taxes, depreciation and amortization through cost and commercial synergies, the companies said.