Armstrong Reenters Linoleum Market

After years of fighting linoleum as a competitor to its vinyl flooring products, Armstrong World Industries, Inc. has now purchased DLW Aktien-gesellschaft of Germany, the world’s second largest linoleum manufacturer. Publicly, Armstrong is playing up other DLW assets, including a strong distribution network in Germany, carpet products, and some other flooring products. But linoleum was likely a factor, as the increasing popularity of imported linoleum has been a sore spot with Armstrong, which was the leading U.S. manufacturer of linoleum before it closed its Lancaster, Pennsylvania factory in 1975. The acquisition puts Armstrong in a position to make linoleum widely available through its flooring distribution network, including possible reintroduction of linoleum as a residential product.

The total dollar value of the deal, which was completed on September 17, 1998, is about $350 million for 93% of DLW’s shares. DLW is Germany’s largest flooring manufacturer with 4,400 employees and total 1997 sales of about $660 million. The company’s linoleum capacity is about 15 million square meters, according to an industry source. The Dutch company Forbo has about 25 million m2 of capacity, and the French firm Sommer has about 2 million m2 of capacity at its factory in Italy.