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Switzerland’s Sika is still battling Saint-Gobain takeover

December 4, 2015
Chemical Value Chain

Swiss construction and automotive chemicals maker Sika AG has repeated its opposition to its takeover by French building materials giant Saint-Gobain SA, a year after the bitter $2.76 billion takeover battle began.

Sika Chairman Paul Hälg has written an open letter to Saint-Gobain shareholders saying the planned takeover, which was first announced on Dec. 8 last year, would destroy value at both companies.

“The intended transaction lacks industrial logic and will destroy value for all shareholders,” Mr. Hälg wrote in the letter.

A spokesman for Saint-Gobain declined to comment on the letter.

The takeover has proved controversial because Paris-based Saint-Gobain has proposed only to buy the 16% stake held by Sika’s founding Burkard family for 2.75 billion Swiss francs ($2.75 billion). Buying the family’s investment vehicle gives control of Sika as it has 52% of the voting rights in the Swiss company.

Baar-based Sika has responded by limiting the family’s voting rights to 5%, a move which is now being disputed in Swiss courts, with a decision expected in the middle of next year.

“Twelve months after the announcement of the intended transaction there is still no end of the conflict in sight,” said Mr. Hälg.

Mr. Hälg said cost savings expected by Saint-Gobain were unrealistic, especially as the two companies are in direct competition in the mortar business. The cash return to Saint-Gobain shareholders would also be minimal, he said.

Sika, which makes chemicals used to reinforce concrete and soundproof of cars, would also be damaged by a takeover, while many Sika managers have raised concerns about a transaction, he added.

“With the support of the entire management team, employee representatives and virtually all of the public shareholders, the non-conflicted board members will continue to act in the best interest of Sika and, therefore, oppose the intended transaction,” wrote Mr. Hälg.

By John Revill

Source: Wall Street Journal

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