James Hardie said it will sell its European walling and flooring business Fermacell to Swiss building materials supplier Holcim for €840m and plans to close its European fibre cement business.
The sale marks a retreat from Europe by fibre cement maker as it seeks to sharpen its focus on North America after investor criticism of its $8.75 billion purchase of US building products group AZEK last year.
“The strategic divestiture of our European operations and the intended closure of the European fibre cement business will enable us to focus on our highest growth and return opportunities,” CEO Aaron Erter said today.
James Hardie faced heavy shareholder backlash over the AZEK deal struck at a 37% premium, triggering a board shake-up and erasing billions of dollars in market value.
Investors had also questioned the execution of the AZEK transaction, funded by debt and a major share issuance, during a period of volatility in the US housing market.
James Hardie said it intends to use around $600m from the Fermacell sale proceeds to repay debt. It also unveiled a $250m share repurchase programme.
“Past strategies for growing the European business have fallen by the wayside, and unless the management had a focused Europe strategy there doesn’t seem much point in holding onto it,” said Esther Holloway, an equity analyst at Morningstar.
Analysts at Citi and RBC Capital Markets cited the deal as a pathway for James Hardie to focus on AZEK and its core markets, including North America.
Separately, Holcim said it expects the deal, likely to close in the first half of 2027, to be earnings-accretive from the first year.
