US flooring giant Mohawk suggests its offering a ‘lifeline’ to Bremworth in buying company

Wednesday, 29 October 2025

US flooring giant Mohawk Industries has argued its proposed takeover of the country’s last listed carpet maker, Bremworth, could be a lifeline for the country’s struggling strong-wool sector.

In a clearance application to the Commerce Commission this week, Mohawk laid out the reasons that its proposed acquisition of rival Bremworth would not lessen competition, and could in fact save the company in the face of increased global competition in carpet and flooring more generally.

In early October, carpet and rug maker Bremworth said it had entered into a scheme implementation agreement with Floorscape Limited, a wholly owned subsidiary of Mohawk Industries, which also owns Bremworth’s main domestic carpet-making rival, Bremworth.

The deal would value Bremworth at between $70 - $77 million.

Mohawk argued in its Commerce Commission submission for clearance to pursue the deal that even after acquiring all Bremworth shares, the combined group would continue to face intense competition from imported carpet and hard-flooring products, as well as from large retail buying groups with significant countervailing power.

A clearance would leave Mohawk, the world’s largest flooring company, as New Zealand’s biggest carpet manufacturer with only one domestic rival, Carpet Mill. Imports now comprise almost 50% of this country’s wholesale carpet market.

Mohawk further said tariffs from major exporting nations had fallen substantially since the commission last reviewed the carpet industry nearly two decades ago.

That, alongside competition from global flooring firms like Victoria Carpets and Belgotex, provided “strong and continuing competitive constraint.”

The competition had increased even since the commission previously examined Godfrey Hirst’s 2006 acquisition of Feltex, it said, with many consumers now viewing hard-surface flooring and ceramics as substitutes for carpet.

Beyond competition arguments, Mohawk’s filing framed the acquisition as a potential lifeline for New Zealand’s strong-wool producers.

As Bremworth focused largely on wool carpets while Mohawk’s carpet brands dealt mainly in synthetic product, the US giant argued the deal would give Bremworth access to major global markets.

Mohawk-owned Godfrey Hirst and Bremworth have been bitter foes in the local market, and when Bremworth announced it would be going into 100% wool carpet in 2020, a marketing campaign devised about the environmental impact of synthetic carpets saw the pair end up in court. The case was settled with Bremworth withdrawing the ad.

In any case, in May this year Bremworth announced it would ditch 100% natural fibre and dip into synthetic manufacturing, which chairman Rob Hewett said was a more affordable option for the border market.

If the deal with Mohawk is approved by the Commerce Commission and the Australian Competition and Consumer Commission, Bremworth investors are poised to collect between $1.05 and $1.15 per share. Today, the shares are trading at 88c.

Hewett told The Post this month he was confident the deal would be greenlit by regulators.

“We're confident that the Commerce Commission issues can be dealt with, but it has to go through the process,” he said.

Investors would also have to approve the deal, with a shareholder vote likely to be held in March or April.