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Reliance Worldwide Agrees to Brookfield's $2.8 Billion Takeover

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Reliance Worldwide Agrees to Brookfield's $2.8 Billion Takeover

Reliance Worldwide (ASX:RWC) reached an agreement to be fully acquired by U.S. global investment firm Brookfield for $2.8 billion, according to press releases from both companies on Wednesday.

Reliance had received previous offers from Brookfield between April and May before taking on this offer where Brookfield will take over the Australian plumbing and heating company through a scheme of arrangement at $3.38 per share.

Brookfield also agreed for Reliance to undergo a one-month "go shop" period, where the latter will be allowed to solicit alternative proposals from other parties. The go-shop period will run until Oct. 15.

In a note, Macquarie said the go-shop period will allow Reliance to test broader buyer interest, although Brookfield retains matching rights.

"The binding agreement materially de-risks the transaction and provides valuation certainty," Macquarie's analysts, Peter Steyn and William Lavender, said. "The go-shop provision also retains upside optionality from a superior proposal."

As for the moment, Reliance deems that Brookfield's offer could cater to its shareholders' best interests after assessing the proposal.

"The board also considered the executive risk to deliver future growth, as well as the broader macroeconomic and geological environment," Reliance Worldwide Chair Russell Chenu said. He also said the board "unanimously recommends that RWC shareholders vote in favor of the scheme in the absence of a superior proposal..."

The transaction is expected to close in the first quarter of 2027.

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