Elegant Merger of the Week: Wedgwood and Waterford
Two firms whose names are synonymous with quality tableware announced Wednesday that they will join forces, with the Irish producers of Waterford crystal buying out the makers of Britain’s Wedgwood china for $353 million.
Both companies trace their roots back more than 200 years and are among the most respected names in their fields.
The friendly takeover, which is expected to receive the required approval of Wedgwood’s stockholders, would make Waterford the world’s largest producer in this specialized area. Based on recent audited accounts, combined annual sales of the two companies are about $390 million.
‘World’s Best-Laid Tables’
“An opportunity like this only comes once,” Waterford Chairman J. Patrick Hayes said in a prepared statement. “Together we have the tradition, quality, skills and reputation to shape the future of the world’s best-laid tables.”
Wedgwood’s chairman, Sir Arthur Bryan, echoed this enthusiasm. He issued a statement that said in part: “The prospect of our companies working together is very exciting.”
Almost half of Waterford’s annual sales and nearly a third of Wedgwood’s are made in the United States.
A lengthy document setting out the details of the proposed takeover, made public jointly by the financial advisers to the companies, indicates that the increased size and marketing power of the combined companies will be used initially to develop the Western European and Japanese markets.
“The combined group will have the muscle to support stronger marketing efforts and increased investment in distribution and retailing, especially in the Japanese, French, Dutch, Belgian and German markets,” it states.
The Waterford offer, recommended to stockholders unanimously by the Wedgwood board of directors, appears to put an end to a hostile, $210-million bid for Wedgwood made recently by London International, a British consumer products and contraceptive company. That bid is under investigation by Britain’s Monopolies and Mergers Commission because a subsidiary of London International, Royal Worcester Spode, produces china.
A prestigious name and consistent profitability apparently made the Wedgwood company an attractive target at a time when large takeover bids are becoming routine in Britain.
The origins of Wedgwood go back to the 1750s, in the Midlands of Staffordshire near the industrial city of Stoke-on-Trent. Wedgwood’s success represents a triumph over adversity by its founder, Josiah Wedgwood.
When Wedgwood’s father died, he had to leave school at age 9 and go to work for an older brother as a potter’s apprentice. At the end of his training, the brother refused him a partnership, and the rejection led him to set up, in 1759, the business that has become so famous.
His initial output was a distinctive cream-colored ware finished with a bright, clear green glaze. Within three years, he began producing an attractive, inexpensive tableware called “Queen’s Ware,” which brought quality earthenware within reach of average people. His success was immediate.
Wedgwood later became intrigued with the crude experiments of other Staffordshire potters with so-called Egyptian black. He developed a smooth, fine-grained “black basalt” that continues to be one of Wedgwood’s best-known products.
Inventor of Jasper
However, the best known of his inventions, the one that has come to be so closely identified with his name, is a fine, unglazed, vitreous stoneware known as Jasper, which can be stained blue, green, lilac, yellow, maroon or black. A recent Wedgwood brochure calls it “the most valued and sought-after range of ornamental ware in the world (today).”
Following Wedgwood’s death in 1795, the company prospered under several generations of the family until the mid-1960s, when it became publicly owned, with its stock quoted on the London Stock Exchange. In the year ending last March 31, Wedgwood posted sales of $212 million and pretax profits of $28 million.
In 1979, Wedgwood bought Franciscan Ceramics of Glendale, the state’s oldest dinnerware manufacturer, but declining sales forced the company to close the plant in 1984 and shift production to England.
Steeped in Tradition
Waterford is as steeped in tradition as Wedgwood. The Waterford Glass Group is the custodian of a glass-cutting art in the southeastern Irish seaport of Waterford that dates to the 1720s.
The area’s first glass products were noted for their thick walls and deeply incised geometric cuttings. The pieces were brilliantly polished, but a smokey, opaque quality in the glass was considered a drawback. Beginning around 1830, the first clear crystal was produced.
Despite its color, the older, opaque Waterford crystal is still prized by collectors.
Waterford glass production ceased in 1851, when British taxes became prohibitive, and it was not until a century later, in 1951, that a new glassworks was established in the town to revive the tradition and the classic patterns.
