The move is in line with Baxi Group’s strategic intent to create a European Group, offering a broad range of space and water heating products for most residential and commercial applications. It gives Baxi Group a leading position in the only major boiler market in Europe where it is currently unrepresented and will increase its annual total boiler sales by 19 percent to 975,000 units per year.

The expansion into the Spanish market adds to Baxi Group’s strength across Europe. The Group is the UK market leader,and also has significant market shares in Germany, France, Italy and other Continental Europe territories. It employs more than 5,100 people(excluding the Roca deal) across Europe, with production facilities in the UK, Italy, France, Germany and Denmark and a newly opened facility in Turkey. It is also expanding into new markets with a direct presence in Russia and China, and joint venture partnerships in developing locations such as Turkey, Romania, the Czech Republic and Argentina.

Mark Edwards CEO of Baxi Group commented: “We are delighted to have the opportunity to invest in the Iberian Peninsula. Roca is the leading brand name in Spain and Portugal and the acquisition is in line with the Group’s objective of increasing its presence in the major European markets. This is a very complementary acquisition for the Group and strengthens our ability to operate on a truly European scale.”

Completion of the transaction is subject to its clearance by the competition authorities in Spain and Portugal, and is expected to take place by July 2005, with financing led and arranged by The Royal Bank of Scotland plc.

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