US tariffs boost NZ wool carpet export opportunity
A 50% tariff slapped by the US on goods from India last month has opened an opportunity for New Zealand wool carpets exports to North America.
Under the deal, Mohawk, which also owns carpet manufacturer Godfrey Hirst NZ Limited, will pay between $1.05 to $1.15/share subject to market conditions and business performance. This includes a capital return of between 30c and 40c/share - between $21 million and $28m.
Bremworth says the sale price is 135% to Bremworth's share price prior to commencement of the strategic review announced in February 2025 and 85% to its most recent closing price prior to the announcement of the deal.
Bremworth released a scheme implementation agreement it had signed with Floorscape Limited, a wholly owned subsidiary of Mohawk Industries.
The deal is conditional on several matters, including shareholder approval, High Court approval, New Zealand Commerce Commission clearance, Australian Competition and Consumer Commission approval, and the Independent Advisor concluding that the scheme price is within or above its valuation range.
Bremworth's board is urging shareholders to accept the deal.
Chair Rob Hewett says the agreement delivers a favourable outcome for shareholders while also creating long-term strategic benefits for New Zealand manufacturing, wool growers and regional communities.
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He says it follows a comprehensive and strategic review and extensive engagement with potential buyers.
"Our focus throughout has been on securing the best possible outcome for shareholders.
"This agreement reflects the strength of Bremworth's brand and its future potential. It is a positivbe outcome for shareholders who have stood by the company through some very challenging years. The offer provides certainty of value at a meaningful premium.
"Looking beyond shareholder returns, the acquisition by Mohawk, a business with significant revenues, strong balance sheet and operations in more than 170 countries, represents a significant vote of confidence in New Zealand manufacturing. Importantly, this transaction also offers strategic benefits for New Zealand."
Bremworth's wool and premium carpet products will be positioned within Mohawk's global distribution networks, providing greater export reach and showcasing New Zealand's natural fibre story on the world stage.
With access to Mohawk's capital and scale, Bremworth will be better able to compete in New Zealand and Australia with competitively priced imported carpets and provide opportunities for growth in global markets (North America and Europe) that have been challenging to compete in as a smaller competitor.
"In this way, a sale to Mohawk should strengthen demand for New Zealand strong wool, supporting farmgate returns and regional economies. With Bremworth on a surer financial footing, this should also accelerate our innovation pipeline in both wool-based and synthetic flooring solutions," says Hewett.
Craig Woolford, chief executive officer of Bremworth, says the transaction will provide the operational backing model to build capability and deliver more for customers and retail partners.
"With Mohawk's resources behind us, we can sharpen our focus on customer service, expand our retail footprint in Australasia and give New Zealand-made carpets a stronger presence in the global market. This is about creating opportunities for everyone connected with Bremworth."
Business Revamp
Listed company Bremworth underwent a board and management revamp earlier this year.
Unhappy shareholders forced the departure of directors and executives. They were unhappy with the performance of the business, claiming that Bremworth had not delivered the revenue, margins and profits expected by shareholders from the wool-only strategy adopted five years ago.
Rob Hewett, who took over as chair, has been leading a restructure of the business.
