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Saint-Gobain, Sika Clash on Takeover

Thursday, March 5, 2015

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Europe’s biggest supplier of building materials is encountering strong resistance in its $3 billion bid to acquire a controlling interest in a Swiss specialty chemical company.

A majority of Sika AG’s stakeholders, along with Sika’s board of directors and management team, now oppose the planned takeover by Saint-Gobain, the company said in a statement Friday (Feb. 27).


Sika, a producer of waterproofing, sealants and soundproofing products for the construction industry, is opposing a hostile takeover by French conglomerate Saint-Gobain.

The dispute arose in December 2014, when Saint-Gobain, based in Courbevoie, France, announced plans to take control of the Baar-based company.

The companies compete directly in the mortar business.


Saint-Gobain’s proposed acquisition involves the purchase of Schenker Winkler Holding AG, which owns 16.1 percent of Sika’s capital and 52.4 percent of its voting rights. The purchase price is 2.75 billion Swiss francs ($3.1 billion USD).

Schenker Winkler Holding AG is controlled by the Burkard-Schenker family, Sika’s founders.

The French conglomerate says the deal would generate $221 million in annual cost-saving synergies by 2019.

Further, Saint-Gobain has said it does not intend to launch an offer for Sika’s remaining shares and has full confidence in the company to continue to develop the business.

Voicing Opposition

However, Sika’s management team and its board of directors have voiced strong opposition to the transaction, saying it would present “numerous conflicts to the detriment of the public shareholders.”

In January, Sika’s board said the Burkard-Schenker family should have its voting rights reduced to 5 percent because the rights were granted, in part, to protect the firm from such takeovers.

Saint-Gobain via Pinterest

Saint-Gobain maintains that the proposed acquisition will generate cost savings of $221 million in 2019. The company is erecting pavilions to celebrate its 350th anniversary.

Saint-Gobain says that such a reduction is against the principles of business law and Swiss governance.

The family also called the move illegal and has challenged the limitation before the Cantonal Court of Zug. The family says it will resort to all necessary legal means to enforce its rights.

In February, Sika’s chief executive sent a letter to Saint-Gobain, urging it  to abandon the plans. The letter said the two companies differ in culture and management, according to reports.

Saint-Gobain has maintained its commitment to the deal.

Thwarting the Transaction

A vote on the transaction has yet to occur. Attempts to convene a meeting by the Schenker Winkler Holding group have failed, and Sika’s efforts to thwart the transaction continue.

Shareholder support for the Sika board and management has grown over 50 percent, the company said Friday. Many investors, including the Bill & Melinda Gates Foundation and Fidelity Investments, have backed the efforts mounted by Sika's board, according to the company.


Members of Sika’s management team say they intend to resign if the deal materializes.

Such transactions are subject to approval by anti-trust regulators. Members of Sika's management team say they intend to resign if the deal materializes.

The Companies

Founded in 1910, Sika is a world leader in construction chemicals, adhesives and sealants. Its portfolio includes waterproofing, sealing and soundproofing products for the construction industry.

The company employs more than 17,000 people in 90 countries and reported about 5.14 billion Swiss francs (about $5.35 billion USD) in sales in 2013.

Saint-Gobain traces its roots to 1665, when it received a patent during the reign of Louis XIV to manufacture mirror glass. The company produces glass and high-performance materials for housing and industrial markets as well as building materials for the construction industry.

The company employs about 190,000 people in 64 countries and posted sales of €42 billion (about $47 billion USD) in 2013.

Editor's Note: This post was updated at 12:01 ET March 5, 2015, to correct a reference to the bid amount.


Tagged categories: Acquisitions; Asia Pacific; Building Envelope; Business matters; Coatings manufacturers; Construction chemicals; EMEA (Europe, Middle East and Africa); Latin America; North America; Sealant; Sika; Waterproofing

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