Lixil on basic agreement to acquire Grohe for USD4 billion - CEO
Lixil Group Corp Chief Executive Yoshiaki Fujimori issued a statement on Thursday that the Japanese company had reached a basic agreement to acquire Europe's biggest bathroom equipment maker Grohe for JPY400 billion or USD4.05 billion. A basic agreement as per Code of Federal regulations is not a full contract, but is a written form of understanding between parties. Fujimori also added that the deal would be announced sometime later in the day.
The statement from Fujimori had followed a Nikkei business newspaper report that Lixil would be announcing a buyout deal of Grohe from its owners. The owners were TPG Capital and Credit Suisse's private equity arm. Both owners had been toying the idea of exiting from Grohe via a public listing.
The report also said that Lixil had arranged with Japanese banks of over JPY200 billion in loans to prepare for its leveraged buyout of the European firm. The Nikkei report also said that Lixil would set up a company for the special purpose of handling the transaction. Lixil would be putting in around JPY130 billion while Development Bank of Japan would be adding JPY50 billion in the special-purpose company.