(MENAFN - AFP) German sanitary fittings maker Grohe said Thursday it is being taken over by Japanese housing and building materials company Lixil in a deal to form the world's largest player in the sector.
Grohe "has entered into an agreement with Lixil and Development Bank of Japan in relation to the sale of an 87.5-percent equity interest in Grohe. This transaction represents the largest ever German investment by a Japanese company," the German group said in a statement.
Grohe said its current owners -- US investment fund TPG and DLJ Merchant Banking Partners, part of Swiss bank Credit Suisse -- would sell their stakes to a company jointly owned by Lixil and Development Bank of Japan.
"The implied enterprise value, including the assumption of debt, is 3.06 billion euros (4.1 billion). The transaction is subject to customary regulatory and antitrust approvals and is expected to close in the first quarter of 2014," the statement said.
"The combined sanitary businesses of both groups generate more than 4.0 billion euros of annual revenue, making it the largest player in its industry," Grohe added.
Grohe said its chief executive David Haines would "remain in this position and has signed a new five-year contract."
Lixil and Development Bank of Japan "will have seats on the supervisory board" of the Luxembourg-based holding company.
Earlier this year, Grohe raised its stake in Chinese group Joyou.
"For Joyou in particular, this new partnership will be of enormous benefit, as our ability to grow and strengthen the brand in the Asia-Pacific region will be enhanced," Haines said.
Lixil president Yoshiaki Fukimori described Grohe as "one of the most well-known brands in the global sanitary market."