Investing.com-- The world’s largest fiber cement maker James Hardie (NYSE: JHX ) Industries (ASX: JHX ) announced on Monday that it has agreed to acquire U.S.-based Azek Company Inc (NYSE: AZEK ) in a deal valued at $8.75 billion.

Under the terms of the agreement, Azek shareholders will receive $26.45 in cash and 1.0340 shares of James Hardie for each Azek share. The stock and cash consideration represents a total per-share value of $56.88, which is at a premium of 37% to AZEK’s last close.

Upon completion, James Hardie shareholders will own approximately 74% of the combined entity, while Azek investors will hold the remaining 26%.

The acquisition significantly expands James Hardie’s footprint in North America by integrating Azek’s exterior products, including decking and railing, with its existing fiber cement offerings. The deal is expected to generate at least $350 million in annual synergies and accelerate revenue growth, James Hardie said in a statement.

"Together, we will be well positioned to drive sustained above market growth as a leader across attractive categories for the exterior of the home," said Aaron Erter, James Hardie CEO.

James Hardie shares slumped 11.3% to A$41.51 in early trade, their lowest level since early November 2023.

Following the acquisition, James Hardie will maintain its existing CHESS Depositary Interest (CDI) listing on the Australian Securities Exchange (ASX) and will also list its ordinary shares on the New York Stock Exchange (NYSE).

Azek, headquartered in Chicago, specializes in environmentally sustainable materials, including TimberTech decking.

The deal, subject to regulatory approval, is expected to close in the second half of 2025.