The manufacturer and distributor of building materials Saint-Gobain intends to take control of the Swiss Sika without launch a bid for the entire capital, provoking the ire of the group specializing in chemical products for buildings.
Saint-Gobain will spend 2.75 billion Swiss francs (2.3 billion euros) to acquire 16.1% stake in Sika from family Schenker Winkler, according to a statement from the French group. The transaction will allow it to acquire 52.4% of the voting rights and give him control of Sika without launching a takeover bid (OPA), which would have greatly increased the cost of the operation. Saint-Gobain hopes to complete the transaction, negotiated in the greatest secrecy, the second half of 2015.
“This is a major movement for the implementation of the strategy and strengthening our group “, said Monday the CEO of Saint-Gobain, Pierre-André de Chalendar, during a conference call. Sika, which employs 16,000 people worldwide, achieved last year a turnover of 5.1 billion Swiss francs (4.3 billion euros). Saint-Gobain presents him as the “world’s leading chemical construction and the world number two adhesives and gaskets for industrial applications.”
The French group is very clear on the fact that did not “intend to make an offer on the entire share capital of Sika”, despite the company’s change of control. Swiss law allows, contrary to what would be the rule in many countries, including France. The acquisition of the whole group would have cost a lot more in that it is the stock market 8.3 billion Swiss francs (6.9 billion euros). The initiative of Saint-Gobain was not appreciated by the Board of Directors of Sika, who rejected his offer because not seeing “industrial logic”.
In a statement, the board of the Swiss group said to have been informed of the operation Friday night and said that Saint-Gobain intends to replace if the operation was successful. Pierre-André de Chalendar said he was “extremely surprised” by this stance. “At this point, I do not explain it. There must be emotional elements that I do not control,” the CEO said citing “a shift in attitude over the weekend that (‘ they have) learned yesterday (Note: Sunday). ” “The family decided to sell its stake and established, to do this, a process that was both competitive and confidential,” said the boss of the French group.
From the moment ” family informed the board and management of the decision taken, “Saint-Gobain has had” constructive meetings (…) early in the weekend on the industrial project that (could) have in common, “especially with the January Jenisch CEO and President Paul Hälg. But Sunday night, hours before the announcement of the transaction, the board announced its rejection of the transaction. Saint-Gobain has yet committed to keeping the team in place and Pierre-André de Chalendar still hopes to convince by the closing of the transaction, which has yet to receive the green light from competition authorities.
The French group will integrate Sika “in its accounts with a positive impact on net income in the first year,” he said. “The operation is expected to generate an amount of € 100 million synergies in the second year (2017), increased to EUR 180 million per year from 2019,” assured Saint-Gobain, which is convinced that it “will create value from the fourth year.”
Meanwhile, the French group has revived the disengagement process Verallia, its glass packaging subsidiary, as an outright assignment. He had already finalized in April the sale of the North American branch of Verallia to the Irish Ardagh to 1.275 billion euros.
“A formal, competitive process will be launched on the basis of the results of the second half, up sharply from the first half, with the objective of finding, after consultation with employee representatives, an agreement with a buyer before the summer of 2015, “the company said. “We have received many expressions of interest and we believe that the time has come,” said Pierre-André de Chalendar, who intends to sell “all Verallia in one block.”
Saint-Gobain had renounced in extremis in June 2011 at the IPO of Verallia, when everything was ready, due to the bad weather which then shook global markets. These two simultaneous announcements were poorly received at the Paris Bourse, where Saint-Gobain title lost nearly 4% in early trade at 35.77 euros in a market down slightly. The action of Sika fell on the Swiss Stock Exchange 11.71% to 9 h 30, in a market down 0.19%.
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