Mohawk Industries to acquire Eliane

Jeffrey S. Lorberbaum, Chairman and CEO of Mohawk Industries

In a further prestigious addition to its portfolio, US giant Mohawk Industries is set to acquire Eliane, one of the largest Brazilian groups in the ceramic tile sector with a production capacity of around 36 million sq.m/year and six factories located in the states of Santa Catarina (Cocal do Sul and Criciúma) and Bahia (Camaçari). This marks Mohawk Industries’ first investment in ceramic tile production in South America and joins the Calhoun, Georgia-based group’s operations in USA, Mexico, Europe and Russia.

Jeffrey S. Lorberbaum, Chairman and CEO of Mohawk Industries, announced the acquisition on 25 October during the presentation of the third quarter results: “On October 15, we executed an agreement to purchase Eliane, one of the largest ceramic tile companies in Brazil, for approximately $250 million,” he said. “Brazil is the world’s third largest ceramic tile market, where Eliane is a leader in premium porcelain with annual sales of approximately $215 million. We anticipate the acquisition closing in the fourth quarter.

Edson Gaidzinski Jr., Chairman Eliane

Edson Gaidzinski, Jr, Chairman of Eliane, noted that the acquisition of the company by the world’s largest group in the sector “will trigger a new cycle of development and enable the Eliane brand to maintain its leadership for long into the future by accelerating the strategic investment plan and adopting new technologies and best practices in the various areas of operation”. According to Eliane, the acquisition by Mohawk Industries will not involve any change in business practices, brand structure or management.

In 2017, 80% of Eliane revenues (940 million Real) was generated by sales in the Brazilian market, where the group’s products are sold at more than 15,000 stores. The remaining 20% was earned from exports to more than 80 countries, including the United States (Eliane has a distribution centre in Dallas), Canada, Latin America, Europe and the Middle East.

Mohawk Industries posted 6% growth in net sales to $7.5 billion in the first 9 months of 2018, while net earnings fell by 4% with respect to the same period in 2017. Commenting on the figures, Jeffrey S. Lorberbaum confirmed that the third quarter results fell short of expectations. “Most of our markets have experienced weakening demand, inflation and pricing pressures,” he noted, adding that the fourth quarter results are expected to continue the trends experienced in the third quarter with a slight slowdown in sales in most markets and product categories. Lorberbaum believes that going forward the group’s results should improve due to pricing alignment, an enhanced product offering and the completion of new investments. He also confirmed that Mohawk Industries will continue its strategy of growth through acquisitions. “We will continue acquiring premier companies like Eliane to expand our offering and geographic presence,” he said.