Sector News

Sika management against Saint-Gobain takeover

December 9, 2014
Energy & Chemical Value Chain
(Reuters) – Saint-Gobain’s (SGOB.PA) 2.75 billion Swiss franc ($2.8 billion) takeover of rival Sika (SIK.VX) risks being a messy affair after executives at the Swiss chemicals firm said they will quit if the sale goes through.
 
The Swiss family that owns a controlling stake in Sika put it up for auction in a confidential process, won by the French building materials company with an offer at 80 percent above Friday’s closing share price.
 
Sika’s board and management were informed of the sale on Friday and Saint-Gobain started discussions with Sika at the weekend. By Sunday night, Sika executives had concluded they did not want to be taken over by the French firm and would resign.
 
The prospect of an acrimonious handover sent Sika shares sliding as much as 20 percent on Monday, wiping 2 billion francs of its market value, while Saint-Gobain’s fell nearly 6 percent.
 
Saint-Gobain Chief Executive Pierre-Andre de Chalendar said its purchase of 52.4 percent of the Sika voting rights from the Burkard-Schenker family was “absolutely irrevocable”, and the deal would close in the second half of 2015 at the latest.
 
The Saint-Gobain chief said he was surprised by Sika’s reaction, saying the French firm had held constructive discussions on Saturday and planned to retain Sika’s management team after the takeover.
 
Sika’s Chairman Paul Johann Haelg made it clear at a news conference in Zurich on Monday that the company’s executives were not on board: “This transaction is not in the interest of Sika and its public shareholders.”
 
Sika said in a statement that all non-family board members and the entire company’s management will resign when and if the transaction goes through.
 
A problem for Sika shareholders is that the Burkard-Schenker family’s majority voting rights come with only 16.1 percent of the shares. Saint-Gobain, however, will be able to incorporate Sika onto its accounts without buying any of the other 85.9 percent of the shares.
 
“This is a disaster for the public shareholders, among them pension funds,” said Gregor Greber, chairman of Zurich-based shareholder advisory group ZRating.
 
Saint-Gobain, Europe’s biggest supplier of building materials, said it hoped the deal would generate 100 million euros ($120 million) in annual cost savings from 2017, 180 million from 2019, and create value by the fourth year.
 
Sika, the world’s leading supplier of construction chemicals, said it could not see the industrial logic for the deal and disputed Saint-Gobain’s cost savings estimates.
 
To stay independent, Sika would have to find a “white knight” bidder to top Saint-Gobain’s offer to the Burkard-Schenker family, said Bank Vontobel analyst Christian Arnold.
 
BY NATALIE HUET AND OLIVER HIRT (Additional reporting by Gilles Guillaume and Blaise Robinson in Paris; writing by Katharina Bart in Zurich.; editing by David Clarke)

comments closed

Related News

April 14, 2024

Nadja Håkansson appointed Chief Executive Officer of thyssenkrupp Uhde

Energy & Chemical Value Chain

The future CEO of thyssenkrupp Uhde, Nadja Håkansson, has held various management positions at Siemens and Siemens Energy and looks back on over 18 years of national and international experience in the areas of supply chain management, operations, sales and corporate management.

April 14, 2024

Neste and Lotte Chemical team up to scale renewable plastics from used cooking oil

Energy & Chemical Value Chain

Neste and South Korean company Lotte Chemical have partnered on a project to elevate the sustainability profile of chemicals and plastics. The partnership’s ambition is to replace fossil resources with renewable raw materials that offer a lower carbon footprint.

April 14, 2024

EU chemical industry confidence shows upward trend

Energy & Chemical Value Chain

At least the confidence in the chemical sector has been seeing an upward trend and the trade balance is recovering as destocking seems to be coming to an end. Citing projections from the European Central Bank, CEFIC states that the level of inflation is expected to fall from 5.4% in 2023 to 2.3% in 2024.

How can we help you?

We're easy to reach