Groupe SEB, which owns the Tefal, Rowenta, Moulinex and Krups brands, has signed an agreement with private equity firm KKR for the acquisition of the German WMF Group for a total of €1.58 billion (£1.23bn).
WMF Group specialises in coffee machines and cookware and its brands include WMF, Silit, Kaiser, Schaerer and Hepp. The acquisition will enable Groupe SEB to enter the professional coffee machine market, as well as strengthen its position in cookware.
The merger will also allow the company to accelerate its development in the key market of kitchen utensils and accessories. It follows the acquisition of kitchen tools and accessories manufacturer EMSA, which it acquired in May, to reach sales of more then €350 million.
Groupe SEB paid a total of €1.58 billion, based on a purchase price of €1.02bn and on €565m assumed net debt, as of December 31, 2015.
The proposal will be submitted to the relevant competition authorities, with approval expected in the second half of the year.
In 2015, the WMF Group reported revenue of €1.1bn, up 4.3 per cent. On the year before. It has a 28 per cent global share in the professional coffee machine market and in Germany, a 20 per cent market share in cookware.
Groupe SEB said it aims to consolidate its portfolio with the new brands, which will enable further expansion of the products into new territories.
The company estimates that the merger would generate yearly synergies of around €40m from 2020 onwards.