James Hardie’s $3.9 billion acquisition of US rival AZEK was pitched as a bold move to strengthen its grip on the American home exteriors market. 

But months after the announcement, the deal is still clouded by questions. Not so much about strategy but how it was handled with investors. And what toll it will take long term on the share price.

What happened?

The acquisition of AZEK by James Hardie was unveiled in early 2025. The deal was structured as a part-cash, part-scrip deal that didn’t require a shareholder vote. At least according to James Hardie executives. 

Shareholders were perturbed by the idea that a deal of that size should have probably gone to a vote regardless of how the deal was put together.

Analyst sentiment also turned, with some levelling similar criticism over the decision to skip consultation with shareholders, despite the acquisition’s potential to reshape the business.

Strategically-speaking, the aim of acquiring AZEK was to consolidate James Hardie’s position as a leader in home builds, especially across North America.

But so far, that pitch hasn’t been enough to win over the market.

Red, red lines

The stock initially tumbled on the announcement and has failed to recover meaningfully in the months since. 

More recently, investor sentiment took another hit when James Hardie flagged additional legal and transaction costs associated with completing the deal.

The cooling sentiment was front and centre on this week’s episode of Switzer Investing TV, with analysts from Shaw and Partners and Fairmont Equities weighing in.

“The market didn’t like it, did it?” said Adam Dawes of Shaw and Partners rhetorically.

“It’s actually not a bad acquisition. It’s just being done with scrip as well as cash. So there’s some debt there and there’s more — there’s excess paper on the market. 

“I think that’s what the market’s not too happy about.”

He added that while funding for the deal had now been secured, the market had already priced in its concern.

“Everyone’s got used to it, I think. The price definitely reflects the market’s sentiment to the stock at the moment.”

That’s a sentiment echoed by Michael Gable of Fairmont Equities on the same episode of Switzer Investing TV, who reviewed James Hardie’s chart performance and came to a blunt conclusion:

“Price action is pretty poor at the moment,” Gable said.

“I think it’s too early now to say that we’ve got a low in James Hardie. Maybe it wants to retest these lows here — which is just under $30. I think we need more evidence.”

Gable noted the absence of a typical post-sell-off bounce, describing the stock as “almost back to those lows near April” and warning that it hasn’t shown convincing signs of recovery.

So where does that leave investors?

Despite long-term faith in the underlying business, the AZEK acquisition has clearly shaken market and investor confidence. Mostly because of how the deal was handled it seems.

Unless James Hardie can start delivering clear earnings upside and show how AZEK will contribute meaningfully to growth, the “misadventure” label may stick.