Freudenberg Weighs In on Nilfisk Takeover With $595M Cash Bid

COPENHAGEN - German family-owned company Freudenberg Group has made a $595 million all-cash takeover offer for Nilfisk Holding A/S, the industrial vacuum cleaner manufacturer backed by the Lego family. The offer values Nilfisk at approximately DKK 3.8 billion, or DKK 140 per share, a 35.9% premium over its closing price on December 10, 2025 according to Bloomberg. The Nilfisk board has unanimously recommended the offer to shareholders, calling it the most attractive outcome of a competitive strategic review.

The deal follows a challenging period for Nilfisk, which has struggled with growth and faced a significant drop in share price since its 2017 spinoff from NKT A/S. The company recently revised its 2025 full-year outlook, citing weak demand in its U.S. market and supply chain disruptions. The board emphasized the all-cash nature of the offer and its premium as key factors in its recommendation.

Freudenberg, a long-standing player in the home and cleaning solutions industry, will acquire all outstanding shares in Nilfisk through its subsidiary Freudenberg Home and Cleaning Solutions. The offer is subject to a 90% shareholder acceptance threshold and is expected to complete in the first half of 2026. The deal also includes plans to delist Nilfisk from Nasdaq Copenhagen, signaling a shift in the company's ownership and governance structure according to Reuters.

Strategic Rationale Behind the Offer

The offer from Freudenberg reflects a broader trend of consolidation in the industrial cleaning equipment sector. Nilfisk, known for its products used in professional and industrial settings, has a strong brand presence in markets such as North America and Europe. However, it has struggled to sustain consistent growth, with its shares losing nearly two-thirds of their value since 2017. Freudenberg sees value in acquiring a complementary business that can expand its footprint in professional cleaning solutions.

The premium offered by Freudenberg is among the highest seen in recent takeover activity in the sector. The price represents a 39.8% premium over the one-month volume-weighted average share price and a 42.3% premium over the 12-month average. Shareholders will have a clear decision ahead, with major shareholders and parts of management already committing to accept the offer.

What This Means for Investors

Investors in Nilfisk will need to weigh the immediate cash offer against the company's uncertain future as a standalone entity. Kirkbi, the investment vehicle for the Lego family, holds a 20% stake in the company and will likely play a key role in the decision-making process. The offer provides a significant return for shareholders, especially given the recent volatility in Nilfisk's stock and its weakened financial position.

The deal also highlights the appeal of industrial businesses in a challenging economic climate. Despite recent earnings struggles, the industrial vacuum cleaner market remains relatively stable, driven by demand in manufacturing, healthcare, and hospitality sectors. Analysts are likely to assess how Freudenberg plans to integrate Nilfisk and whether the acquisition will lead to cost synergies or expanded product offerings.

Outlook and Market Reaction

The announcement has been well received by the market, with the board's strong recommendation reinforcing the credibility of the offer. However, the final outcome will depend on shareholder approval and regulatory clearances. If the deal goes through, it could mark a turning point for Nilfisk, offering a fresh strategic direction under the ownership of a larger, more diversified industrial group.

For now, the focus remains on the upcoming shareholder vote and the potential delisting of Nilfisk from Copenhagen's stock exchange. Investors will also watch for updates on Freudenberg's integration strategy and the expected timeline for completing the acquisition.