French-based building-materials manufacturer Saint-Gobain Group announced plans on Dec. 8 to acquire a controlling interest in Swiss-based construction-chemical maker Sika AG. One of the largest makers of building products in the world, Saint-Gobain arranged the purchase of 16.1% of Sika's shares and 52.4% of its voting rights from the family of the company's founder.
Both companies have North American subsidiaries, and the merger is expected to combine their broad portfolios of building products. "The complementary synergies [of the acquisition] also apply to North America," says Susanne Trabitzsch, spokeswoman for Saint-Gobain. "We expect to have a stronger presence in the U.S. that will enable us to develop greater commercial synergies within the businesses," she told ENR.
Saint-Gobain sells glass, tile and other manufactured building products under its own brand name as well as other labels. It owns several popular brands of building materials in the U.S., including the siding and roofing maker CertainTeed. Sika is best known for its adhesives, concrete admixtures and sealants and does business in the U.S. through its subsidiary Sika America.
Prior to the news of the sale, Sika released a report in October citing 15% sales growth in the first nine months of 2014 and healthy sales growth in emerging markets.
The acquisition process has been somewhat rocky so far, as the senior management team of Sika says it was not informed of the deal in advance. In a press conference held in Zurich on Dec. 8, Sika Chairman Paul Haelg said there were numerous conflicts of interest in the proposed deal, such as Saint-Gobain's and Sika's competition in the adhesives market.
Citing Saint-Gobain's established presence in markets into which Sika is looking to expand, Haelg said the deal would frustrate Sika's previously established growth strategy. "It is impossible for our independent board members to serve in the best interest of Sika as a company and also the best interest of our public shareholders," he told reporters. "We do not see a possibility to continue under a new structure."
Sika's executive board and management team have threatened to resign en masse if the sale of the company closes. But in an interview with CNBC on Dec. 8, Saint-Gobain CEO Pierre-André de Chalendar said the deal will go through regardless and that there will be a "change of attitude" at Sika. He defended the acquisition against objections raised by Sika's management team and said there were multiple profitable synergies to be found, such as in purchasing arrangements from suppliers.
Sika's mangement has not released a formal statement since Dec. 8 regarding the sale, but a spokesman on Dec. 12 did tell reporters that negotiations between Sika management and Saint-Gobain are ongoing and that no agreement had been reached.