TPG and Credit Suisse in $4.1bn manufacturing exit

Roughly 10 years after acquiring GROHE, a maker of luxury bathroom fittings, TPG and Credit Suisse will sell the company to Japan’s Lixil, marking the largest ever investment in Germany by a Japanese company.

TPG and DLJ Merchant Banking Partners, the private equity group owned by Credit Suisse, will sell their 87.5% percent stake in German bathroom fixtures manufacturer GROHE Group in a deal that values the company at about $4.1 billion.

Japanese building products company Lixil and the Development Bank of Japan will purchase GROHE, which makes sanitary fittings such as faucets and shower heads. The deal marks the largest ever investment in Germany by a Japanese company, according to a statement. The transaction is expected to close during the first quarter of 2014.

“As a growth-oriented company, Lixil has always been the preferred partner to support us with our growth strategy, especially in emerging markets,” David Haines, GROHE's chief executive officer, said in a statement. 

TPG and Credit Suisse acquired Grohe in 2004 for $1.84 billion. The company reported sales in the first half of 2013 of about $984 million. 

As a result of the deal, Grohe and Lixil will become the world's biggest maker of bathroom and kitchen accessories. It will also have the potential to expand via Joyou, a bathroom fittings unit that sells through 4,000 distributors in China, in which Grohe owns a controlling stake. Lixil's global network had already been bolstered by a $775 million deal for Italian curtain walling maker Permasteelisa in 2011 and its $542 million purchase of US fixtures maker American Standard earlier this year.

Lixil's purchase of Grohe is made more notable by the fact that activity from Japanese firms had slowed this year, investing $27 billion in buying foreign companies so far in 2013 compared to a record $83 billion in 2012.