Reliance Worldwide Locks in Brookfield Deal with Exchange-Rate Twist

Reliance Worldwide has agreed to a deal with Brookfield, converting its month-old takeover proposal into a binding scheme. However, Australian shareholders will no longer receive the fixed A$4.75 offer initially proposed. Instead, they'll get US$3.38 per share, which translates to A$4.75 at the current exchange rate.

The deal values Reliance Worldwide at approximately US$2.9 billion, including lease liabilities. The merger spread includes an exchange-rate bet, with the company's shares closed at A$4.33 on September 15. Brookfield has fixed its obligation in U.S. dollars, but shareholders may elect to receive payment in either currency.

The Australian-dollar value will move before the expected first-quarter 2027 closing, which assumes all approvals are received. If the deal doesn't close by then, Brookfield will add a daily premium of 0.0263 U.S. cents per share, starting March 31, 2027. The contractual end date is June 30, 2027.