Mohawk Industries to pay $2.6 billion for Unilin Holding

Tuesday, July 5, 2005 | 9:17 a.m.

CALHOUN, Ga. -- Carpet and flooring company Mohawk Industries Inc. said Monday it would pay $2.6 billion for Unilin Holding NV, a leading maker of laminate flooring based in Belgium.

Following the 2002 purchase of Dal-Tile, which made Mohawk the top U.S. company in ceramic flooring, the acquisition of Unilin represents "the second major step in diversifying into a total flooring company," Mohawk Chairman and CEO Jeffrey S. Lorberbaum said in a statement Monday.

Unilin has extensive knowledge of the European flooring market and a growing share of the U.S. market, Lorberbaum said, while Mohawk can offer the European company "an unparalleled U.S. distribution network and the capacity to accelerate market share in the United States."

Based in Belgium, Unilin has over 2,400 employees, primarily in Belgium, France, the Netherlands and the United States. With annual sales of about $1 billion, its laminate flooring products are marketed under the Quick-Step brand through independent distributors.

Calhoun-based Mohawk, with about 32,000 employees and operating revenue of $5.88 billion in 2004, is a leading supplier of residential and commercial flooring, including tufted and woven broadloom carpet, ceramic tile, laminate, wood, stone, vinyl, and rugs.

Its brands include Mohawk, Karastan, Ralph Lauren, Lees, Bigelow, Dal-Tile and American Olean.

"Laminate flooring has demonstrated exceptional growth and market share gains in Europe over the last decade and the 2004 U.S. market of $1.2 billion, which grew at 24 percent from 2003, is currently anticipated to grow in excess of 15 percent per annum," Lorberbaum said.

He said Mohawk also prizes Unilin's management team, and its chairman, Frans De Cock, would be elected to Mohawk's board.

The acquisition, unanimously approved by Mohawk's board and Unilin shareholders, is expected to close in the fourth quarter of 2005 and is subject to regulatory approvals and other closing conditions.