Updated: Brussels-based plastics pipe manufacturer Aliaxis SA has offered to buy Finland's Uponor Oyj for $2 billion in another play to combine operations and strengthen its position as a leader in water management solutions.
Aliaxis holds about 5 percent of Uponor's issued and outstanding shares as of April 14 but a bigger shareholder may try to block any deal.
To push for support, Aliaxis officials are making their ownership public along with their rationale for pursuing the acquisition, which they see as mutually beneficial in the face of uncertain times in the building and construction market.
In a 40-minute webcast April 17, Aliaxis CEO Eric Olsen made a public appeal to Uponor's board directors and shareholders. He talked about the opportunity for complementary market positions, limited overlap and synergies that could be achieved mainly from cross-selling.
"Our potential offer is about growth with purpose, scale, innovation, smart fluid management solutions and a long-term focus for the benefit of all stakeholders," Olsen said.
For example, Uponor operates primarily in the Nordic region and Eastern Europe with a focus on residential building markets for potable water and radiant heating while Aliaxis primarily operates in western and southern Europe with a focus on building drains and waste and other markets.
Aliaxis also owns Ipex USA LLC of North Carolina, one of the five largest pipe, profile and tubing makers in North America.
A merging would improve product lines for both companies and give them a chance to address the world's water challenges through greater market presence, know-how and operational capabilities, Olsen said.
"Uponor has deep expertise in the building segment with hot and cold offerings and in surface heating and cooling while we offer other fluid management solutions to the building segment and we're also active in the infrastructure industry and agriculture segments as well," Olsen said.
However, the potential offer — following up on an earlier offer that was rejected in 2022 — may not succeed, as Uponor's largest shareholder says it doesn't reflect the full value of the manufacturer of high density polyethylene and cross-linked polyethylene (PEX) pipes.
The Aliaxis offer price of 25 euros cash for outstanding shares would value Uponor at 1.82 billion million euros ($2 billion), which represents 44.6 percent of the April 14 closing price of 16.64 euros on the Nasdaq Helsinki.