Fletcher’s Crane Bid

New Zealand-based Fletcher Building lodged a surprise $740 million hostile takeover offer for building supplies company, Crane Group, on December 15. Fletcher Building said the acquisition would give it a plastic pipe manufacturing business, which would extend its existing concrete pipe business.

Crane’s trade distribution business in plumbing and electrical supplies would complement Fletcher’s existing trade distribution business. In industrial products, Crane had a specialty metal manufacturing and distribution business that would complement Fletcher Building’s significant steel distribution business in New Zealand. Fletcher Building said it will operate Crane as a new independent division.

Crane said Fletcher’s bid was at a low point in the industry cycle and that the offer ignored the ‘substantial’ synergies expected following the acquisition, which included streamlining the corporate functions of Crane, the use of a combined entity for the purchase of goods and services and joining the logistics and distribution networks of the two companies. Boral, Wesfarmers and GWA International have been reported as potential competitors to Fletcher’s bid.