The GROHE Group has entered into an agreement with LIXIL Corporation and Development Bank of Japan in relation to the sale of an 87.5% equity interest in GROHE Group from TPG and DLJ Merchant Banking Partners.

The combined sanitary businesses of both groups generate more than €4billion of annual revenue.

GROHE remains independent and continues to implement its plan for long-term, sustainable and profitable growth.

David J Haines, chief executive officer of GROHE, will remain in this position and has signed a new five-year contract.

“For GROHE and Joyou, LIXIL is a perfect match,” said Haines. “It is currently building a strong track record as a global leader in the building materials and housing equipment industry. As a growth-oriented company, LIXIL has always been the preferred partner to support us with our growth strategy, especially in emerging markets.

“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.”

LIXIL and DBJ will acquire GROHE through a jointly owned entity of which each party will own a 50% voting interest. President Yoshiaki Fujimori said: “The joint acquisition structure enables LIXIL to act on this strategic opportunity while maintaining its current leverage level and the financial flexibility to pursue other strategic opportunities as they arise.”

The implied Enterprise Value, including the assumption of debt, is EURO 3.06 bn. The transaction is subject to customary regulatory and antitrust approvals and is expected to close in the first quarter of 2014.