Shares in Japanese bathroom giant Lixil Group tumbled Tuesday following a report it is in advanced talks to buy Germany’s Grohe for more than $4 billion.
The Wall Street Journal quoted several people close to the deal as saying Lixil — which groups several makers of toilets, kitchen furniture, windows and other household brands — would pay 3 billion euros ($4.05 billion) for Grohe.
Monday’s report comes less than three months after the Japanese firm bought ASD Americas Holding Corp, the parent company of the American Standard bathroom brand, for 53.1 billion yen ($537 million).
Shares in Lixil, which declined to comment on the report, tumbled 6.32 percent to 2,043 yen in Tokyo.
The deal would be the largest Japanese purchase of a German company since 1995, the paper said citing data provider Dealogic.
“The move is certainly aggressive, coming on the heels of a just-completed acquisition,” said Yoshihiro Okumura, general manager at Chibagin Asset Management.
“There aren’t many doubts about the ability of Lixil to pull off such a transaction, but it will probably require some kind of either equity- or debt-based financing.”
Grohe’s owners, financial investors TPG and Credit Suisse’s private equity arm, have been actively trying to sell the company but also eyed a share offering if any buyout plan collapsed, the Journal said.
Talks on the buyout of Dusseldorf-based Grohe could wrap up this week, it said but added other possible buyers may return to the table if the Lixil deal fails, including Switzerland’s Geberit AG which floated an offer earlier this month.
Japan's Lixil shares sink on Grohe buyout report
