Australia’s Reliance Worldwide will back an almost US$2.9-billion buyout from global investment firm Brookfield BN-T, it said on Wednesday, as the plumbing supplies company confronts the continuing impact of U.S. tariffs and economic uncertainty.
Shares of Reliance jumped more than 7 per cent in early trade on Wednesday to 4.65 Australian dollars, their highest level since May last year. The stock later pared gains to close almost 3.5 per cent higher to 4.48 Australian dollars, outperforming the S&P/ASX 200 index’s 0.3-per-cent rise.
Reliance said Brookfield had elected to switch its offer to dollars, with a bid of US$3.38 a share, equivalent to the 4.75 Australian dollars offer made in August. Investors can choose to be paid in dollars or Australian dollars if the deal proceeds and is approved by shareholders, Reliance said.
“The board is unanimous in its view that this transaction is in the best interests of RWC shareholders,” said Reliance Worldwide chair Russell Chenu in a statement.
Large pension funds could determine approval
Two of Australia’s largest pension funds, AustralianSuper and Aware Super, own about 20.2 per cent of Reliance and will have a major say in the deal’s approval. AustralianSuper declined to comment on whether the Brookfield bid would be supported. Aware Super did not respond to a request for comment.
AustralianSuper voted against Brookfield’s US$10.6-billion bid for Origin Energy in 2023 which was ultimately rejected by investors.
Reliance depends on North America for the majority of its profit, where CEO Heath Sharp said the business’s prospects had been hard hit by tariffs.
The company’s Americas sales slipped 4 per cent in its 2026 financial year, while adjusted operating earnings fell more than 11 per cent due to the impact of U.S. tariffs, lower volumes and higher input costs.
Brookfield made three approaches in the first half of the year before returning in August with a fourth, worth 4.75 Australian dollars a share.
The companies had agreed to a “Go Shop” provision, unusual in Australian deals, that allows Reliance Worldwide to seek rival bids, share due-diligence materials and negotiate terms. Brookfield has the right to at least match any new offer.