Aliaxis drops bid for Uponor as Georg Fischer offers $2.2B for pipe maker

Brussels-based Aliaxis SA dropped its pursuit of Finland's Uponor Oyj after Switzerland-based Georg Fischer Ltd. emerged as a new bidder with a 2.1 billion euro ($2.26 billion) offer to buy the plastic pipe extruder.

Aliaxis, the owner of Pineville, N.C.-based pipe extruder Ipex USA LLC, had bumped up its offer to 25.75 euros per share for Uponor on May 22, which valued the company at 1.87 billion euros ($2.06 billion).

Then, Schaffhausen, Switzerland-based Georg Fischer Ltd. offered 28.85 euros per share, which the board of directors of Uponor has recommended that its shareholders accept.

Aliaxis officials still are looking to grow their business to modernize water infrastructure through acquisition, but they decided to withdraw their offer for Uponor, at least for the time being, after reviewing the competing offer made June 12, according to Aliaxis CEO Eric Olsen.

"Aliaxis is a company on the move as we have demonstrated over the past two years. We remain fully committed to delivering our 'Growth with Purpose' strategy, with innovation and sustainability as main driving forces. As a global leader, we will continue deploying our external growth road map, leveraging our clear business strategy and our very robust balance sheet, while always maintaining a clear focus on value creation with financial discipline in any acquisition," Olsen said in a June 14 news release.

With estimated sales of $1.26 billion, Ipex is the No. 5 pipe, profile and tubing extruder in North America, according to Plastics News' latest ranking.

Aliaxis' withdrawal clears the way for a deal between Uponor and Georg Fischer Ltd.

"We recognize that a combination with GF would provide strength for the future development of the combined company. Furthermore, considering the offered value, it is in the best interest of Uponor's shareholders," Hans Sohlström, a member of Uponor's board, commented.

According to GF, Uponor would substantially increase the sales of GF Piping Systems in North America, where it estimates that one third of new homes have Uponor pipes, and in the Nordic countries, where Uponor is one of the largest suppliers.

Georg Fischer Piping Systems has estimated North American plastic pipe extrusion sales of $230 million, according to Plastics News data. The Irvine, Calif.-based unit of Georg Fischer AG has eight North American factories.

Uponor Inc., the Apple Valley, Minn.-based unit of Uponor Oyj, has estimated North American pipe sales of $490 million, according to PN data. It has two North American plants.

GF and Uponor have complementary products and geographical footprints for the pipe and utility markets and similar corporate cultures that would allow a seamless integration of Uponor as a fourth division within GF, according to a 10-page GF announcement of its offer.

Both companies also are committed to sustainable solutions, the announcement says, pointing to Uponor creating the world's first chemically recycled PEX pipe, "which paves the way for a circular value chain."

GF Piping Systems and Uponor would have combined sales of about 3.6 billion euros ($3.9 billion) while the entire GF group with Uponor would have combined sales of about 5.4 billion euros ($5.8 billion), the announcement says.

"By combining more than 100 years of expertise of Uponor with our know-how of over two centuries, we would have a great opportunity to build a global leader in the water and flow solutions industry," Yves Serra, chair of the GF board of directors, said in the announcement.

Uponor President and CEO Michael Rauterkus agreed, saying he has a lot of respect for GF's heritage of innovation and advanced technology.

"A combination of Uponor and GF would help us accelerate the execution of our growth strategy and bring benefits to our customers by offering even more competitive, innovative, and sustainable water solutions. Uponor is stronger than ever and has great potential to further accelerate the expansion of its offering in combination with GF," Rauterkus said.

Global trends, such as the increased need for reliable water management, growing demand for clean water, and use of radiant heating and cooling for efficient indoor climate management are expected to support growth.

GF also expects the combined companies to generate synergies of $35 million to $45 million with the cost savings related to operational optimization, procurement and productivity, and mutual cross-selling opportunities in existing and new markets and applications.

Aliaxis' unsolicited buyout offer for Uponor generated the interest from other potential buyers and partners, Sohlström had said.

Even after Uponor rejected the offer, Aliaxis continued to buy shares, raising its stake from 5 percent to about 20 percent of Uponor.

Oras Invest and other major shareholders of Uponor that support the GF offer represent about 36.9 percent of all the issued shares in Uponor.

The offer period is expected to begin on or about June 26 and expire on or about Sept. 1, 2023, unless GF extends it.

GF officials want to complete the offer during the fourth quarter of 2023. If they do, to ensure a smooth integration, GF intends to nominate Annika Paasikivi, the chair of the Uponor board, for election to the GF board at the next annual meeting.