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Headwaters shares leap after Australian construction firm Boral agrees to buy it

A Boral concrete truck is seen at the Boral concrete plant in Sydney, Australia.
Jack Atley | Bloomberg | Getty Images

Shares of Headwaters leaped 17 percent Monday after it agreed to be bought by Australian construction firm Boral for $1.86 billion in cash.

Boral, Australia's biggest supplier of building materials, said Sunday it would offer Headwaters shareholders $24.25 per share, a 20 percent premium to the Utah-based company's Friday's closing price

The combined groups would become the largest U.S. supplier of fly ash, according to Reuters, a key ingredient in concrete. The proposed deal comes as President-elect Donald Trump vows to increase infrastructure spending.

"This agreed transaction is the result of significant evaluation and engagement between our companies," Boral's CEO Mike Kane said in a statement. "The businesses of Headwaters are highly complementary with Boral's existing US operations and the transaction price reflects our belief that there is strong commercial rationale for combining the two portfolios."

The companies said the proposed acquisition was unanimously approved by both boards. The deal is expected to be completed by mid-2017, subject to customary closing conditions.

Headwaters' stock is up more than 39 percent year to date.

Headwaters 5-Day Chart