By Sherin Sunny and Roshan Thomas

Feb 5 (Reuters) - Australia's Maas Group said on Thursday it would sell its building materials division for up to A$1.70 billion ($1.19 billion) to pivot towards artificial intelligence-related infrastructure, sending its shares crashing more than 26%.

Maas ‌Group will sell its Construction Materials (CM) unit to German cement maker Heidelberg Materials' local arm, ​HMA, and invest A$100 million in Nvidia ( NVDA )-backed AI infrastructure firm Firmus ‍Group for a 1.7% stake.

Founded over two decades ago ⁠by former rugby ⁠player Wes Maas, the conglomerate is selling a unit that generated about half of its ‌A$219 million in core operating earnings ​in fiscal 2025.

Shares of the firm plunged as much as 26.1% in the steepest one-day decline ever, while the ⁠broader benchmark index fell 0.4%.

Ron Shamgar, ‍head ​of Australian equities at TAMIM Asset Management, said, the market was surprised the company is exiting a strong construction business in Queensland, ‍riding population growth and the Brisbane Olympics build-up.

"And instead it is going into the capex heavy AI/Data center sector."

The divestment is part of the Australian construction materials, equipment and services provider's broader shift towards data center construction, a sector that has attracted investor interest as ​demand ‍grows for facilities supporting AI systems.

Australian data center landlord Goodman Group ( GMGSF ) has already embarked on a shift towards data center development.

Maas ​Group's A$100 million minority investment in Firmus follows earlier dealings with the company. It secured an A$200 million electrical infrastructure contract with Firmus Technologies in mid-December.

After the completion of the transaction, about 1,140 employees will transfer with the construction materials business to HMA and ensure continuity of operations, it said.

The transaction ​is expected to be completed in the second half of calendar year 2026, and is subject to regulatory and shareholders' approvals.

($1 = 1.4292 Australian dollars)