In an unprecedented transaction for the Mexican market, Rheem Manufacturing Co. and Grupo Industrial Saltillo announced an agreement in which the former would acquire GIS’ Water Heating Business.
The transaction includes the subsidiaries Calentadores de America, S.A. de C.V. (Calorex), Fluida, S.A. de C.V. (Cifunsa), and Water Heating Technologies Corp. (American Standard Water Heaters), which manufacture and sale water heaters and fluid conduction devices.
“To GIS, this operation offers an opportunity to focus and simplify its business portfolio,” said José Manuel Arana, GIS general director, in a release sent to the Mexican Stock Exchange. “To the Water Heating Business, it is an option to go global and potentialize its growth by being part of one of the most relevant players of this industry globally.”
The transaction amounts to $3,915 millions pesos ($204 million). The resources from this operation will be used to align GIS’ debt structure to the currency in which the company’s global operations get their income from, with efficiency and advantages in rates and terms. This will give the company enough flexibility to invest in other business units and push their growth, as well as improve the company’s overall profitability.
GIS holds interests in companies in the automotive, building materials, and home products industries. It has 8,000 employees in 25 business units, with operations in Mexico, Spain, Czech Republic, Poland, Italy and China, as well as market share and distribution in the U.S.