The US$3.38-a-share offer follows months of tariff pressure and three rejected bids
Reliance Worldwide Corp.'s board has unanimously recommended shareholders accept a roughly US$2.9 billion takeover offer from Brookfield Asset Management, the Australian plumbing products maker said Wednesday. The agreement caps months of tariff-driven earnings pressure and four rounds of bidding, but the deal's approval is not guaranteed.
Under the binding scheme, Brookfield will pay US$3.38 per share in cash, equivalent to A$4.75 based on the Sept. 15 exchange rate, with shareholders able to elect either currency. Brookfield's own release put the transaction's enterprise value at approximately US$2.8 billion, while Reuters cited a deal value of about US$2.9 billion, or A$4.1 billion, including debt – a distinction between enterprise and equity value rather than a change in per-share terms.
The offer represents a 31.5% premium to Reliance's undisturbed share price and a 43% premium to its six-month volume-weighted average price, according to Skrill Network. It followed three earlier bids of A$4.15, A$4.25 and A$4.50 a share made between April and May, all of which were rejected before Brookfield returned in August with the A$4.75 proposal.
Tariffs cited in board's rationale
Reliance's Americas sales fell 4% and adjusted earnings before interest, taxes, depreciation and amortization dropped 12.8% in its 2026 financial year, which the company attributed to US tariffs, lower volumes and higher input costs. Reliance depends on North America for the majority of its profit, and chief executive Heath Sharp said the business's prospects had been hard hit by tariffs, according to the Globe and Mail.
Reliance chairman Russell Chenu said "this Transaction is in the best interests of RWC shareholders." Anuj Ranjan, chief executive of Brookfield's Private Equity group, described Reliance as "a global, market-leading industrial company with strong brands, durable customer relationships."
Shares in Reliance rose as much as 7% to A$4.65 in early Sydney trading – the highest intraday level since May 2025 – before closing 3.5% higher.
Go-shop clause and pension fund history raise doubt
The agreement includes a 30-day "go-shop" provision, unusual in Australian takeovers, running until Oct. 15 and allowing Reliance to solicit rival bids; Brookfield retains the right to match any superior offer, according to Reuters. Grant Thornton has been appointed independent expert, with its opinion on the deal expected in November.
AustralianSuper and Aware Super together hold about 20.2% of Reliance and will have a significant say in the deal's approval. AustralianSuper twice increased its Reliance stake following the August proposal, moving from 10.94% to 16.68%, according to ION Analytics, which some reports highlighting Reliance and Brookfield were uncertain of the fund's motives.
AustralianSuper voted against Brookfield's US$10.6 billion bid for Origin Energy in 2023, a deal investors ultimately rejected. A source familiar with the fund's approach to prior deals told ION Analytics that AustralianSuper's motives are typically based on how it assesses value.
