Trade merchant Wolseley has agreed to sell a majority stake in Tobler, its Swiss plumbing subsidiary, to local competitor Walter Meier for SFr118m (£94m).
The FTSE 250 firm will retain a 39 per cent stake in the Tobler and the transaction is subject to approval by Walter Meier's shareholders and Swiss authorities.
UK markets were referred to as "weak" by Wolseley's chief executive John Martin in December.
Although tracing its roots back to the 19th century in the UK, it is the firm's US division, Ferguson, that is going from strength to strength. In its latest results posted revenues of £2.9bn – more than the amount generated by the rest of the firm.
Wolseley said in a stockmarket announcement:
If completed, the merger would be consistent with the strategic objectives of both Wolseley and Walter Meier to create a high quality, market-leading business across plumbing, heating and HVAC [heating, ventilation and air conditioning] distribution in Switzerland.
Wolseley's shares fell in early trading before regaining lost ground to be broadly in line with yesterday's market close at 1pm.