Jotun AS, the third-generation, family-owned Norwegian paint and coatings conglomerate, has blocked a $933 million takeover offer from pizza and hygiene products maker Orkla ASA.
Jotun spokesman Fredrik Tangeraas confirmed Thursday (Sept. 1) that the Gleditsch family, which founded Jotun in 1920, had rejected the majority bid by Orkla, which now holds 38.2 percent of Jotun’s voting rights. The Gleditsch family owns 59 percent of the company’s voting rights and has said it wants to maintain majority control.
|Jotun began as a paint distributor, supplying whaling fleets in Norway in 1920.|
Jotun has not issued a statement on the takeover attempt “as this is a matter for our shareholders to consider,” Tangeraas said.
Orkla ASA, also based in Norway, owns approximately 100 highly diversified companies that produce everything from pizzas and snacks to commercial cleaners, building materials and heat exchangers.
‘We Wanted a Larger Stake’
“Jotun is a fine company, and we have never concealed the fact that we wanted a larger stake,” Orkla President and CEO Bjørn M. Wiggen said in a prepared statement.
“Should we become a majority shareholder, Orkla will maintain and strengthen Jotun strategically and operationally along the lines that have been laid down in the past few years, with the clear intention of maintaining the head office in Sandefjord.”
Orkla has offered Jotun’s shareholders NOK 70,000 ($13,015.51 US) per share, which would give it 63.6 percent of the share capital and 90.9 percent of the company’s voting right. The offer focuses on Jotun’s powerful A shares, each of which controls 10 times as many votes as its B shares. The acceptance period expires on Sept. 30, although Orkla says it may extend that deadline.
Orkla says it wants the Gleditsch family “to maintain a substantial stake and to continue the close collaboration” in the event of a takeover.
Coatings Presence Sought
Orkla says that it wants to expand into the paint and coatings sector and that Jotun is its “preferred alternative” to do so.
“Jotun’s strong brand and market position offer good opportunities for long-term global growth,” said Wiggen. “Orkla has the necessary prerequisites to enable Jotun to position itself in a future consolidation of the sector.”
|Jotun coatings were used to paint the Eiffel Tower in 2002.|
With 7,800 employees, a presence in 80 countries, and $2.5 billion in sales in 2010, the Jotun Group is one of the world’s leading manufacturers of paints and coatings. The company produces protective and marine coatings, decorative paints, yachting products and powder coatings.
The Company that Odd Built
Jotun (named for a member of a race of giants in Norse mythology) traces its roots to a paint distributor shop that Odd Gleditsch Sr. opened in 1920. According to company history, Gleditsch began as a distributor of paint supplies for whaling fleets but soon “saw the potential in manufacturing the paint himself.”
Gleditsch took over a failing local producer of antifoulings and marine paints, and the business grew to supply coatings to the Norwegian merchant navy. In 1962, Jotun opened its first production plant outside Norway, in Libya. Later, the manufacturer’s production facilities spread to the Middle East and South East Asia.
|Today’s Jotun Group is the result of a merger of four paint companies in 1972. Second from right is Odd Gleditsch Jr., son of Jotun’s founder, who represented the youngest—but largest—of the four companies.|
By the 1960s, however, competition for the lucrative Norwegian paint market had grown fierce, dominated by Jotun and three other companies. Gleditsch Jr. forged a merger among the four, creating A/S Jotungruppen in 1972.
Today, Norway boasts one of the highest levels of paint consumption per capita in the world, and the price and quality level of the products is high, Jotun says.