Japan's Lixil tables preliminary $4-bn bid for German sanitaryware maker Grohe
26 September 2013
Lixil Corp, Japan's largest manufacturer group for building materials and housing equipment, has tabled a preliminary ¥400 billion ($4 billion) takeover bid for German sanitary fittings maker Grohe AG.
Speaking to reporters yesterday, Yoshiaki Fujimori, CEO of Lixil said that his company has reached a basic agreement on the deal but minor issues have yet to be sorted out.
Japanese newspaper business daily Nikkei had yesterday reported that Lixil had already arranged for more than ¥200 billion in loans from Japanese banks for funding the acquisition.
Grohe's owners, TPG Capital and the private equity arm of Credit Suisse, are running a dual-track process of either selling the company or a stock market listing.
TPG Capital and Credit Suisse had acquired Grohe in 2004 from BC Partners for €1.5 billion.
Capital and Credit Suisse have valued Grohe, Europe's biggest sanitary fittings maker, at up to €4 billion ($5 billion) including debt, and may still opt for an IPO if a deal does not materialise.
Early this month, Reuters reported that five suitors, including Switzerland's Geberit, Lixil, Brazil's Duratex and two private equity firms had submitted final bids for Grohe.
Founded by Friedrich Grohe in 1936, Grohe manufactures and sells a full range of sanitary products and systems for residential, public and commercial installations.
It is a European market leader and one of the top three international manufacturers of sanitary fitting and has production plants in six locations including three in Germany, and one each in Portugal, Thailand and Canada.
The Dusseldorf-based company, which acquired a 72-per cent stake in leading Chinese sanitary fittings producer Joyou in 2011, sells its products in 130 countries, and has a global market share of around eight per cent
Grohe, which generates 85 per cent of its annual sales outside of Germany, posted sales of €1.4 billion and adjusted earnings before interest, taxes, depreciation and amortisation of €273 million.
Tokyo-based Lixil is Japan's largest manufacturer group for building materials and housing equipment having posted net sales of ¥1.4 trillion in 2012.
Its portfolio includes solutions in housing and lifestyle and an extensive product lineup fromwindows, tiles, front doors, kitchens, bathrooms, and toilets under the brand name of American Standard, Inax and Tostem.
In Japan, Lixil is the biggest housing and building materials company with top share in eight different categories.
In the global market, its operations are led by group companies, such as Permasteelisa Group, which has strong presence in the curtain wall business with unmatched technology and designs.
Their projects in the US, include New York by Gehry, One Bryant Park in New York and San Francisco Federal Building.