Building materials supplier James Hardie has agreed to buy Europe's biggest fibre gypsum board manufacturer as it looks to expand presence in the region's affluent construction market.
The ASX-listed company will buy the German-based parent of Fermacell GmbH in an all-cash transaction worth 473 million euros ($A738 million), with the deal expected to close in the last quarter of its 2018 fiscal year.
James Hardie will fund the acquisition through debt financing.
Fermacell holds more than 70 per cent share in Europe's fibre gypsum board market and also produces cement-bonded boards.
The company is the leader in a premium, differentiated product category, has strong brand recognition and holds deep customer relationships, which allowed it to increase sales growth and deliver strong returns and cash flow.
The highly complementary acquisition will diversify James Hardie's geographic, product and end-market portfolio, chief executive Louis Gries said.
"Fermacell's market position, go-to-market strategy and strong management team will enable us to scale and accelerate our European business, which has long been a strategic goal," he said.
Fermacell will account for about 15 per cent of total global revenue of the combined business.
James Hardie expects the transaction to be accretive excluding transaction, integration and other one-time costs in its first full fiscal year following the close.
It expects the transaction to be fully accretive in the second full fiscal year.
By 1045 AEDT, James Hardie shares were down 1.1 per cent to $19.04 in a weak Australian market.
