KB Homes Sale Of Division To French Company Approved By EU
After KB Homes posted a loss due to slow domestic sales this past quarter, the company took steps today to shore up it’s cash on hand by selling a 50.01% share of it’s French division to PAI Partners for $783 million dollars.
To me this is a smart move on 2 fronts. With great optimism in France for economic growth with a new government, companies are willing to pay a premium to get into the market. Combine that with record highs for the Euro and KB Homes sold at the top of the market and best exchange rate.
This infuses money into their domestic operations that will struggle for the next few quarters and takes discussion of any liquidity crisis off the table so the company can weather the storm.
So while they lose part of their best performing division, France is not where the future of KB Homes is. Instead they provide a layer of protection to their domestic operations during a rough stretch. Smart move in my book.
Los Angeles-based KB Home, one of the largest U.S. homebuilders, said the sale of 50.01 percent of the unit would net it $783.2 million (580.7 million euros).
France-based PAI said in May it would make a public tender to buy the rest of the unit.
The European Commission approved the deal automatically after receiving no complaints from rivals and identifying no antitrust concerns within a deadline of 25 working days.
The French unit accounted for just over a fifth of KB Home’s total revenue in the first quarter. via Forbes.com
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