Brookfield Targets Reliance Worldwide in $4 Billion Takeover Deal
Synopsis
Brookfield is targeting Reliance Worldwide with a proposed $4 billion takeover, in a deal that could reshape ownership of the Australian plumbing products company.
Key Highlights
- Brookfield has made a takeover offer of $4.75 in cash per share for 100% of Reliance Worldwide.
- The bid puts the plumbing supplies company at an enterprise value of roughly $4 billion.
- Reliance directors have unanimously recommended that shareholders vote in favour of the deal, unless a superior proposal emerges.
- The transaction is expected to close in the first quarter of 2027.
Brookfield Offers $4.75 A Share
Reliance Worldwide opened higher on news that the plumbing supplies company had signed a scheme implementation deed with Brookfield. If successful, the deal underpins a cash takeover for all shares in Reliance Worldwide at $4.75 per share from Brookfield.
It implies an enterprise value for Reliance Worldwide of about $4 billion. The offer topped the last market value of the firm considerably, and it is at a 31.5% premium to its last closing price.
Reliance shares gain on takeover reports
Reliance Worldwide shares quickly gained on the Australian market on news of the takeover proposal. At 11:42am AEST, the share was trading at $4.52 up 4.39%
The offer comes after Brookfield has approached the FTSE 100 company multiple times over the last year. Those previous proposals, which were not binding and unsolicited, were between $4.15 and $4.50 per share before Brookfield boosted its offer to $4.75 a share after an eight-week due diligence review.
Vote on Brookfield Deal By Shareholders
Reliance Worldwide’s directors have unanimously recommended that their fellow shareholders vote in favour of the proposed transaction subject to no superior proposal emerging. The deal is subject to shareholder and regulatory approval before it can be finalised, as previously announced.
The transaction plans to close in Q1 2027. Brookfield has also pledged a ticking fee for shareholders if the deal is not completed within the agreed-upon timetable. As part of the arrangement, investors would be paid 0.026 US cents per share for each day on or after April 1, 2027 if completion has not been achieved by March 31, 2027.
What the Takeover Means for Investors and Business
The move provides Reliance Worldwide shareholders a cash exit at a considerable premium to where the company was trading previously, while allowing Brookfield to acquire a major plumbing supplies business. The outcome will be subject to shareholder approval, regulatory filings and any competing offer for the asset.
The agreement highlights the persistent interest in proven Australian companies from some of the world’s largest investment groups on the part of businesses and investors. This kind of takeover provides immediate cash value for shareholders, but allows private investment firms to take a long-term view with the business.
Source: Capital Briefs
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
