Assa Abloy Completes $4.3 Billion Home-Improvement Buy

By Dominic Chopping

STOCKHOLM--Assa Abloy said late Tuesday that it has completed the $4.3 billion acquisition of Spectrum Brands' hardware and home improvement division and the $800 million divestment of Emtek and its smart residential business in the U.S. and Canada to Fortune Brands Innovations.

The Swedish lock maker announced plans to buy HHI in September 2021 but the U.S. Department of Justice sued to block the deal, saying it would diminish competition in the residential door hardware industry and raise prices.

However, a deal was reached last month to settle the litigation, with Assa Abloy agreeing to divestments in order clear the HHI buy.

HHI reported sales of $1.65 billion in the fiscal year ending September 2022, with an adjusted earnings before interest, taxes, depreciation and amortization margin of 15.6%.

The acquisition is expected to be initially dilutive to the group's operating margin and earnings per share, but operating profit synergies are expected to reach around $100 million within a five-year period, it said.

The Emtek and smart residential business in the U.S. and Canada divested to Fortune Brands represented sales of about $400 million in 2022.

Assa Abloy said the preliminary divestment result, net of exit costs and before taxes, is estimated to be about $300 million.

In a separate announcement, the company said it will book a 2.2 billion Swedish kronor ($203.9 million) impairment of goodwill and other intangible assets in the second quarter of 2023, primarily related to its Citizen ID business.

Write to Dominic Chopping at [e-mail]

(END) Dow Jones Newswires

June 21, 2023 03:25 ET (07:25 GMT)

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