German sanitaryware giant Grohe has agreed to a takeover offer from Lixil Corporation and Development Bank of Japan.The deal, which is expected to be completed early next year, will see TPG Capital and the private equity business of Credit Suisse sell their 87.5% equity interest in Grohe, which is valued at $4.1 billion .
The agreement is reported to be a further aggressive move by Lixil following its acquisition of ASD Americas Holding Corporation – parent company of the American Standard bathroom brand – for $342 million in August. Analysts said Lixil, which owns a range of sanitaryware, kitchens, windows and other household brands, has been hampered by a shrinking Japanese population and saturated markets and is looking further afield for growth opportunities.
It is understood the deal will also see Lixil take over Grohe’s debt, quoted at AUS $1.5bn at the end of December.
It’s widely known that Grohe have been extremely aggressive in certain areas, especially contract specification, in a bid to outsell rivals Hansgrohe and Gerberit. Press reports had claimed other potential buyers were ready to swoop should the Lixil deal have fallen through. These included Swiss-based bathroom supplier Geberit AG, which is thought to have made an offer in early September.
Grohe and its subsidiary Joyou will remain independent and continue to implement plans for long-term, sustainable and profitable growth, a company statement said. With the support of Lixil, this will also include becoming a leading consolidator in the global sanitary industry, which is still characterised by a high degree of fragmentation.
Grohe Chief Executive, David Haines said that the new partnership will be of particular benefit for the Joyou subsidiary, enabling it to enhance and strengthen its hold in the Asia-Pacific region.“Grohe is one of the most well-known brands in the global sanitary market,” Lixil president Yoshiaki Fujimori commented. “In addition to its high standards for quality, Grohe has received high acclaim globally for its leading product design and innovation. We have great respect for what CEO David Haines and his management team have achieved. Bringing Grohe into the Lixil family allows us to make further progress in building the leading platform in the global sanitary industry while also strengthening our distribution network in Asia.”
I guess from a local perspective its a case of “watch this space”!
