Morphy Richards to be sold to Chinese firm in deal worth up to €200 million

Glen Dimplex has agreed to sell its small appliance brand Morphy Richards to a Chinese manufacturer in a deal believed to be worth between €175 million and €200 million (£150m-£170m).

Morphy Richards, which was founded in 1936 and is a Retra associate member, is to be bought by stock market-listed Chinese company Guangdong Xinbao Electrical Appliance Holdings (Xinbao), which trades under the brand Donlim.

The transaction is subject to Chinese government approval, and it is expected to close by the end of the year, staff at Irish-based Glen Dimplex were told, according to a report in The Irish Times.

Morphy Richards is a British brand that was acquired by Glen Dimplex founder, Martin Naughton, in the mid-80s.

Its toasters, kettles and other home appliances are sold in China, Ireland, the UK, Australia and New Zealand, with worldwide retail sales estimated at more than €350 million (£300m), said The Irish Times.

Xinbao, which already manufactures Morphy Richards products in China for Glen Dimplex, is buying the brand globally, but initially it will take full control only of the Chinese and British operations – Glen Dimplex will keep rights to distribute the brand under licence in Ireland, Australia and New Zealand for “at least” 10 years.

Glen Dimplex staff were told of the deal on Wednesday (June 8) an email from Fergal Leamy, the chief executive of the Glen Dimplex group, reported The Irish Times.

He said the company decided to sell after it received an approach from the Chinese buyer.

Mr Leamy told staff that he and Fergal Naughton, the executive chairman of Glen Dimplex, had been working with Donlim/Xinbao for two years on a plan to further develop the Morphy Richards brand in China, which is by far its biggest market.

As part of that process, the Chinese company then made its approach to buy the Morphy Richards unit outright. “We felt it made sense,” Mr Leamy wrote.

He told staff that Morphy Richards represents “less than 3 per cent” of Glen Dimplex’s group revenues, which, said The Irish Times, would suggest it contributes close to €50 million (£42m).

Speaking to The Irish Times, Mr Leamy confirmed the deal, which he said is “very attractive for us”. He said Morphy Richards had become very successful in China, with sales there of more than €200 million (£170m) and this attracted the buyer.

“Normally we would be more of an acquirer than a company that sells. But they made an approach, the offer was attractive and this is part opportunistic by us and part because of our planning. We have significant ambitions in other parts of the business,” he said.

The Morphy Richards deal is not expected to have an impact on Glen Dimplex’s workforce in Ireland, although it could affect a small portion of its staff in Britain, where the Morphy Richards unit employs about 80.