Australian supplier of building fixtures and fittings, GWA Group has agreed to sell the Dux Hot Water business to Japanese water heater manufacturer Noritz Corp for $46 million.
As The Australian reports, the company previously sought to sell Dux to market leader Rheem. However, this attempt was questioned by the Australian Competition and Consumer Commission who claimed such a sale would substantially lessen competition in the market.
Noritz Corporation is a new entrant to the Australian water heater market. Established in Kobe, Japan in 1951, the company is the leading Japanese manufacturer of household water heaters, including continuous flow water heaters for residential and commercial use.
“The GWA Board has previously identified Dux Hot Water as a non-core asset following a strategic review, and this sale announcement follows from an extensive domestic and international sale process,” said a GWA statement.
“The sale agreement is subject to usual terms and conditions and is expected to complete during December 2014. The sale price of $46 million, on a debt and cash free basis, is in line with the book value of Dux Hot Water.”
GWA said it is planning to focus on its bathroom and kitchen and door and access businesses. It plans to also sell its Wetherill Park vitreous china manufacturing site.
“As previously advised the Board will look to return the excess funds received from sale proceeds to shareholders. Work has commenced to ensure the appropriate regulatory approvals and rulings are obtained on a timely basis to support a return to shareholders,” the statement said.
The sale of Dux is expected to be completed next month.