I would like to share with you a mega-deal from last week: On Friday (February 9, 2024), the American building materials manufacturer Owens Corning and leading door manufacturer Masonite International announced in a joint press release that they have signed a takeover agreement.

According to the agreement, Owens Corning is offering Masonite shareholders 133 US dollars (USD) in cash for each share. The offer includes a takeover premium of almost 38% based on the closing price of Masonite shares on February 8, 2024, the last trading day before the announcement of the takeover agreement.

The deal values Masonite International at approximately 3.9 billion USD (equivalent to approximately 3.62 billion euros). Before I explain further details from the takeover agreement, I would like to briefly introduce the companies, which are probably only known in insider circles here.

The companies involved in brief profile The Masonite International Corporation, founded in 1925, is a global leader in designing, manufacturing, marketing, and distributing interior and exterior doors, door system components, and door systems.

The company has been headquartered in Tampa, Florida (about 300 km northwest of Miami) since 2004. Previously, Masonite was based in Canada. The company is named after the Masonite wood fiber board developed by William H. Mason in the 1920s, which is made using a special process under high pressure.

The door manufacturer has 64 production and distribution facilities worldwide, mainly located in North America. Masonite employs over 10,000 people and supplies approximately 7,000 customers worldwide. In the 2022 fiscal year, Masonite achieved annual sales of nearly 2.9 billion USD. Operating profit (EBIT) was 331.5 million USD.

Founded in 1938, Owens Corning is, according to its own statements, a global leader in the field of building and construction materials. The company, headquartered in Toledo, Ohio (located on the western tip of Lake Erie), is divided into three business segments: roofing, insulation, and composites.

Owens Corning employs around 18,000 people in 30 countries. The company is represented in Germany in Brüggen (Lower Rhine), Hamburg, and Hilden. In the 2022 fiscal year, Owens Corning generated sales of 9.8 billion USD. EBIT was 1.7 billion USD in that year.

Further details from the takeover agreement Owens Corning intends to finance the acquisition with cash and a committed loan from Morgan Stanley Senior Funding. Through the deal, the building materials giant aims to further expand its market leadership and expand its product range in the area of doors and door systems.

„Masonite is a market leader that complements our existing residential and exterior product offerings and has consistently demonstrated growth and margin expansion,“ said Brian Chambers, Chairman and CEO of Owens Corning in his statement on the acquisition of Masonite.

This was the market reaction At the New York Stock Exchange NYSE, the Masonite share price rose sharply. It jumped on Friday by over 35% to 130.51 USD and was thus only slightly below the 133 USD offered by Owens Corning. Investors are apparently confident that the deal will go smoothly.

It was a different story with Owens Corning’s shares. These lost over 7% on Friday at the NYSE and ended the week at 148.21 USD. Investors seem to believe that Owens Corning has offered too much for the acquisition of Masonite.

This is how it can continue The transaction is expected to be completed in mid-2024 from the companies‘ perspective. Before that, Masonite shareholders must still approve the deal by tendering their shares. In addition, the relevant regulatory authorities must also approve the deal.