James Hardie Industries plc has announced a "strategic divestiture" of its European operations. As part of the deal, Hardie has agreed to sell its sustainable walling and flooring solutions business Fermacell in Europe (including the fermacell and Aestuver brands) to Swiss building materials giant Holcim for approximately $980 million in cash. James Hardie also intends to close its European fiber cement business, subject to customary legal, regulatory and employee (including competent works council) consultation requirements.

“The strategic divestiture of our European operations and the intended closure of the European fiber cement business will enable us to focus on our highest growth and return opportunities,” said Aaron Erter, CEO of James Hardie. “We believe this divestiture will strengthen our balance sheet, deliver compelling value for our shareholders and position the Fermacell business for long-term success under Holcim’s ownership. We are deeply grateful to our talented team members across Europe, whose expertise and hard work have made meaningful contributions to James Hardie, and we are committed to supporting impacted European fiber cement employees.”

Ongoing leadership and operations

Following completion of the transaction, Hardie says Fermacell will complement Holcim’s ability to broaden its integrated building systems and modular construction offerings. The business will continue to be led by Christian Claus, CEO of Fermacell and President of James Hardie Europe.

“Holcim is a strong strategic fit for the Fermacell business, and importantly, customers will continue to receive high quality and excellent service,” said Claus. “We share a common vision, values and commitment to shaping the future of sustainable construction ... we will be well positioned to support a smooth transition, build on our strong foundation and accelerate our growth. I look forward to continuing to lead the Fermacell business in this next chapter.”

Transaction details, use of proceeds

Hardie says the transaction is expected to be accretive to margin profile and return on invested capital post-close.

The company says it intends to deploy the transaction proceeds to "accelerate deleveraging and return capital to shareholders." Approximately $600 million is expected to be used to repay debt. In addition, James Hardie’s Board of Directors has authorized a new $250 million share repurchase program. "Repurchases may be effected through open-market purchases, accelerated share repurchases or other methods as determined by the Company, subject to market conditions and other relevant considerations," the company writes.

The transaction is expected to close in the first half of calendar 2027, subject to customary closing conditions, including required regulatory approvals and completion of employee consultation processes where required.

Goldman Sachs & Co. LLC is serving as financial advisor to James Hardie, and DLA Piper is serving as legal advisor.

About James Hardie
James Hardie Industries plc is the industry leader in exterior home and outdoor living solutions, with a portfolio that includes fiber cement, fiber gypsum, and composite and PVC decking and railing products. Products offered by James Hardie are engineered for beauty, durability, and climate resilience, and include trusted brands like Hardie®, TimberTech®, AZEK® Exteriors, Versatex®, fermacell® and StruXure®. With a global footprint, the James Hardie portfolio is marketed and sold throughout North America, Europe, Australia and New Zealand.

James Hardie Industries plc is incorporated and existing under the laws of Ireland. As an Irish plc, James Hardie is governed by the Irish Companies Act. James Hardie’s principal executive offices are located at 1st Floor, Block A, One Park Place, Upper Hatch Street, Dublin 2, D02 FD79, Ireland.

Source: financialcontent.com