Saint-Gobain has closed a deal for the controlling stake in the Sika group after carrying out negotiations with the company’s owners, the Burkard family.
The French company signed the ?2.3b deal for the Burkards’ stake in majority shareholder Schenker Winkler Holding, despite opposition from the Sika group’s management board who were unaware that the sale was taking place.
If approved by anti-trust authorities, this deal would give Saint-Gobain control of 52.4% of all voting rights and 16.1% of Sika’s share capital. It has no plans to make any offers to public shareholders, meaning minority parties would see no benefit from the deal.
In a statement released by the Sika board of directors and the group’s management, the company said: “The board and group management of Sika AG have neither been involved nor consulted in connection with the proposed transaction. The board and group management do not support the change of control of Sika to Saint‐Gobain.”
It added that if the deal were to be completed in 2015, Sika’s management would “no longer be in a position to serve in the best interest of the company and all its stakeholders”, and would therefore resign.
Speaking on Monday (December 8), Jan Jenisch, chief executive officer at Sika, said: “If the intended transaction is closed as planned, the management team will step down as a group. I’m not sure what process is behind it, or when that will happen. If this transaction is closed – in three months or three years – I won’t be available to execute it.”
As Saint-Gobain’s competitor in the adhesives and industrial sealants market, Sika says that the French company has “clear strategic intents” and that it will manage the company in its own interest, causing financial harm in the process.
However, Saint-Gobain says that the similarities between the two companies will lead to profits for both. It said that the deal is expected to generate ?100m in synergies from 2017 and ?180 million per year from 2019. The Paris-based company added that it had spoken to executives from Sika and had “very productive talks” over the weekend but that this “open-minded” approach had disappeared.
Speaking exclusively to Roofzine, a spokesperson from Saint-Gobain’s office in Paris, said: “We don’t understand what happened, it was a very emotional time. Our chairman (Pierre-Andr‚ de Chalendar) said it was an emotional reaction.
“We hope the situation will get back to normal.”
When asked if the deal will have an affect on UK operations, the spokesperson said there was no answer to this until the deal is confirmed by anti-trust authorities, which is expected to be in the summer or autumn of 2015.
However, Sika said on Monday (December 8) that it could not see “the industrial logic in the transaction, nor significant synergies”, disputing Saint-Gobain’s cost savings estimates.
The news sent both companies values into decline, with Sika’s share price dropping 21% and Saint-Gobain’s falling by almost 7%.
Despite the animosity from Sika’s management, Saint-Gobain says that it seeks to retain the Swiss group’s leadership and cooperation.
At the time of writing, both Saint-Gobain and Sika were preparing statements on how the deal is likely to affect operations in the UK.
