Swiss sanitary equipment maker Geberit AG said it would buy Finland-based bath and toilet company Sanitec Corp in an all-cash deal valued at about $1.4 billion, to expand its product offering in the medium-to high-end segment.
Geberit said it would offer 97 Swedish krone ($14) per Sanitec share, representing a premium of 54.6 percent to Sanitec's closing price on Oct. 13.
The purchase of Sanitec, a supplier of bathroom ceramics such as toilets and bidets will complement Geberit's installation, flushing and piping systems, as well as strengthen its access to end customers and presence in showrooms.
"This transaction will make us the leader in the broader sanitary products industry and expand the addressable market for Geberit," Geberit CEO and Chairman Albert Baehny said in a statement.
The deal, recommended by Sanitec's board of directors, requires Geberit to acquire more than 90 percent of Sanitec's outstanding shares.
Geberit said an offer document would be made public on or about November 14. The acceptance period is expected to run from Nov. 17 until Dec. 22, the company said.
J.P. Morgan is acting as financial advisor to Geberit and Roschier Advokatbyrå and Gleiss Lutz as legal advisers.
Shares of Geberit rose by 1.8 percent in early trade on Tuesday, making it the top-performing stock on the benchmark Swiss Market Index. Sanitec shares rose by a startling 50 percent.