James Hardie and The AZEK Company have signed a definitive agreement to merge their operations. As part of the deal, James Hardie will purchase AZEK with a mix of cash and shares, valuing the transaction at $8.75 billion.

The merger would establish a premier platform for exterior and outdoor living products. The companies believe that by combining complementary products like siding, trim, decking, railing, and pergolas, the brand will provide an innovative material solution to homeowners, customers, and contractors.

“This combination with AZEK is an extraordinary opportunity to accelerate our growth strategy, deliver enhanced and differentiated solutions to our customers and drive shareholder value,” said James Hardie CEO Aaron Erter in a news release announcing the merger. 

“Together, we will be well positioned to drive sustained above-market growth as a leader across attractive categories for the exterior of the home,” he added. 

The boards of directors for both James Hardie and AZEK have unanimously endorsed the transaction. It is expected to conclude in the latter half of calendar year 2025, contingent upon standard closing conditions, necessary regulatory approvals, and approval from AZEK shareholders. A vote from James Hardie shareholders is not required to issue shares related to the transaction.

The combined James Hardie-AZEK operation will increase its total addressable market in North America to $23 billion. 

The companies will provide a full-wrap and complementary solution for the home's exterior and allow Hardie “to deliver significant brands to all of its partners throughout the customer value chain.” 

The merger follows QXO’s entry into the building materials industry by acquiring roofing distributor Beacon.

The companies indicated that including AZEK—whose residential business segment has consistently grown over 15% in net sales annually for the last seven years—will significantly boost James Hardie’s net sales growth. 

Consequently, James Hardie anticipates that this merger will increase its annual net sales by over 250 basis points.

James Hardie CEO Aaron Erter will serve as the CEO and James Hardie chief financial officer Rachel Wilson will serve as CFO of the combined company. Upon the closing of the translation, Howard Heckes, Gary Hendrickson, and Jesse Singh will join James Hardie’s board of directors.

Ryan Merkel, CFA, an equity research analyst with William Blair, released an evaluation that endorses the merger.

“We believe this deal makes sense for both parties, creating the premier building products growth story,” Merkel wrote. “We think the possibility of another bidder is low, and therefore we downgraded AZEK shares to Market Perform; the deal value is fair, in our view.”

For its part, AZEK said that during its four decades, the company has invested in innovation, capabilities, and talent, achieving above-market growth with brands like TimberTech and AZEK Exteriors. 

5 Takeaways

• Major Industry Merger: James Hardie is acquiring AZEK for $8.75 billion, creating a powerhouse in exterior and outdoor living products.
• Expanded Market Reach: The combined company will target a $23 billion North American market, offering a full suite of complementary materials.
• Accelerated Growth: The merger is expected to boost James Hardie’s annual net sales growth by over 250 basis points.
• Leadership & Structure: James Hardie CEO Aaron Erter and CFO Rachel Wilson will lead the new entity, with key AZEK executives joining the board.
• Regulatory & Shareholder Approval: The deal, backed by both companies’ boards, is set to close in late 2025 pending regulatory approvals and AZEK shareholder consent.

“Together with James Hardie, we are delivering value to AZEK shareholders and providing them meaningful participation in the long-term secular and financial growth opportunities created by the combined company,” AZEK CEO Jesse Singh said. 

“We are bringing together two customer-centric organizations with a shared commitment to innovation and building a better, more sustainable and resilient future, and we are excited about the opportunities ahead,” Singh added.