Yoshiaki Fujimori, the Chief Executive of Lixil Group was interviewed by Wall Street Journal in Tokyo on September 30th. Lixi Group, the leading housing and building material maker as founded through merger of two well-established building material companies – Tostem Corp. and Inax Corp. Each one of them has a long history and owns significant market shares in its field. Tostem Corp was established in 1923 and it was a supplier of building materials and services. Inax Corp was a manufactuer of tiles, building material and sanitary fixtures with about 90 years history. The Lixil Group today is a result of a series of mergers and acquisitions of companies in the industry.
Currently, Lixil has two large international brands under its name, American Standard – the parent of the U.S. toilet and plumbing facilities and Grohe. Especially, Grohe was a recent acquisition and a huge move for Lixil. The company spent $4.13 billion to acquire this long-running German bathroom-fittings maker, which is the largest ever Japanese investment in a German company. The purpose of this acquisition is to help Lixil grow its market shares in emerging overseas markets, such as Latin America. In addition, Lixil consider China as a target market with huge potential to grow. Grohe’s operations in China will definitely facilitate Lixil’s sale in mainland China.
Apparently, Mergers & Acquisitions has been playing a vital role in this company’s development in the past decade. Also, Mr. Fujimori is famous for the achievement he made in the previous company, General Electric, through several acquisitions. By acquiring existing well-developed companies or those with great potentials, Lixil will be able to accelerate its process of expanding international market and help establish global reputation. For example, in August 2011, the company bought Italian construction-engineering group Permasteelisa SpA for €575 million. Mr. Fujimori mentioned in the interview that these acquisitions will help more than double its overseas sales in the next year. Therefore, M&A has been helping Lixil grow its international businesses and will still be its key marketing strategy of exploring overseas markets in near future.