Fletcher's rally took place against the background of a bad day for world share markets, with the Dow Jones index falling by 507 points or 2.1 per cent to 23,592.
Industrial holding company Broadview, working in materials technology and energy, has about 2900 employees and sales of E700m, Fletcher said.
"The divestment of Formica completes our strategy to exit non-core businesses, having already completed the sale of roof tile group in November. Our five-year strategy is to refocus Fletcher Building's capital and capability behind our New Zealand and Australian businesses, with building products and distribution at our core," Taylor said.
The company was pleased to have signed the sale agreement in line with our target timing, and to have achieved a strong valuation for the business, he said.
"We believe Broadview is a natural owner of Formica, being a leading player in the laminates industry. We are confident that the regulatory the process required to complete the sale will go smoothly, and on that basis expect the sale to be completed by the end of FY19."
Grant Swanepoel of Craigs praised the sale, the price and dividend plan.
"Finally, we get some good news out of this company. It's been a while. It's a great outcome," he said of the sale, particularly because the buyer was a trade business. "That removes any regulatory approvals and means both parties are aligned. It's just the certainty of it. This is a deal that's done," he said of Fletcher quitting Formica.
The dividend reinstatement had been widely expected "but it's good the board had the confidence to come out now. These guys are going to have a fairly light balance sheet," he said, raising questions about an acquisition trail possibility.
"Now they've got a war chest and we're going over the top of a peak cycle into a down cycle in Australia and a modest change in New Zealand....they should sit on their hands for a while and see what pops up. It's not a bad position to be in - cashed up," Swanepoel said.
On the $1.2b sale proceeds, Taylor said it was important to first complete the sale, and that the company would continue to take a prudent approach to management of its balance sheet.
Fletcher confirmed its intention to reinstate dividends in the 2019 financial year, starting
with an interim dividend to be declared on finalisation of the half-year results on
20 February.
"The decision to reinstate the dividend was based on Fletcher Building Board's confidence in the company's trajectory and return to profitability in FY19. The board will size the dividend prudently, having regard to the ongoing capital requirements of the company," the statement said.
"Given the expected settlement timing of the Formica sale, the FY19 dividend is likely to be weighted towards the final dividend.
The $1.2b will be subject to deductions expected to be around $102m, including pension liabilities and other debt-like items retained in the business, and transaction costs, the company said.
