Saint-Gobain announced on Friday that a peace of the brave with the swiss chemist Sika with which it bataillait since 2014, resigning in taking control and becoming its first shareholder. This clarification of the links between the two groups, which puts an end to three and a half years of a battle that is played in front of courts in switzerland, is hailed on the stock Exchange.
Has 11h22, the action Saint-Gobain earned and 2.7% 45,265 euros, while in Zurich the title Sika flew of 9.13% to 8 190 swiss francs.
“This is an excellent agreement (…) which allows us to get out through the top of a folder which no one has ever questioned the strategic sense, but which remained complex and uncertain”, said the CEO of the French group of construction materials, Pierre-André de Chalendar, during a conference call. “Sika (greet) this positive outcome”, said in a press release Paul Hälg, chairman of the board of directors of the swiss group, and Paul Schuler, managing director.
The added-value rather than the uncertainty
Saint-Gobain was heard in December, 2014 with the family Burkard, founder and owner of Sika, to take control of the chemist in switzerland for 2.3 billion euros. This operation remained virtually very interesting, as the market capitalization of Sika has not stopped rising since around 14 billion euros. Faced with the uncertainties of the judicial process, Saint-Gobain has finally decided to relinquish control of Sika and to gain now and a gain.
According to the global agreement reached with the family Burkard and Sika, Saint-Gobain acquires in a first time with Burkard all of the shares of their holding company SWH – who wore the participation of 17% of the family – to 3.22 billion swiss francs, or an amount in excess of over 500 million swiss francs at the price agreed in 2014, to take account of the increase of the value of the chemist. Sika acquires its side with the Saint-Gobain 6,97% of its own capital to to 2.08 billion swiss francs, an amount which includes a bonus of 795 million francs.
In the end, Saint-Gobain became a shareholder in Sika height-10.75%. He indicated that his participation cost in any 1.14 billion swiss francs (954 million euros), whereas it is now worth 1.9 billion swiss francs (1,59 billion euros).
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The French group added that the transaction would thus generate a positive net profit of over € 600 million. Pierre-André de Chalendar has pointed out that the accounting gain was likely to increase with the course of Sika. In return, the parties have decided to put an end to all judicial proceedings in progress.
Several shareholders of Sika, as the fund Columbia Threadneedle, the swiss Ethos foundation and the Bill and Melinda Gates foundation, have welcomed the agreement. They had never accepted the prospect of a takeover indirectly by Saint-Gobain, asking in vain that all the shareholders of Sika enjoy the same financial terms. They also feared that the swiss chemist to lose its attractiveness by becoming an activity among others in the giant French construction materials.
“It was a time that this conflict (…) ends,” says Meriem Mokdad, managing director at Roche Brune Asset Management. “This agreement is beneficial for both companies as they will be able to focus on their strategies.” In exchange for the premium granted by Sika, Saint-Gobain is committed to maintain its share for at least two years and to limit its presence to 10.75% in the following two years, and then to 12,875% for two additional years.
That will be Saint-Gobain in two or six years?
When asked about his intentions – end the adventure with a final release of Sika deer in two years or continue with a climb to the capital in six -, Pierre-André de Chalendar has said that all options remained open. “We don’t want to decide, at this stage, what will be the time horizon of our investment. So I’m not going to tell you if we will sell at the end of the lock up period, or during the next six years, or if we are going to increase after six years”, he told the analysts.
“For the moment, we believe that Sika is a good company and we are very comfortable with the idea of being a shareholder of the long-term at this level.” In order to expand its range of activities beyond the construction materials, Saint-Gobain has been trying for several years to develop, internally or through acquisitions – in the sector of sustainable construction. It is in this capacity that he became interested in Sika, a specialist in collage materials. The two groups announced Friday that they wanted to extend their existing relationship, especially in terms of trade relations and operational innovation.
“(The agreement with Sika) gives us all the necessary room for manoeuvre to pursue our strategy of investment and acquisitions”, also said Pierre-André de Chalendar. It was suggested that the group could speed up this strategy beyond the annual amount of 500 million euros to small and medium-sized acquisitions mentioned up here.
Sika will next convene on June 11, a general meeting of shareholders to simplify a permanent capital structure, the complexity of which has contributed to episodes of stormy years with the founding family. The group will thus remove a statutory provision opting-out (opt-out), the statutory limitation of transfer of securities to 5%, cancel 6,97% of shares acquired from SWH and to convert all shares into a single class on the principle of “one share, one vote”. The president of Sika recognized that with this new structure, the swiss group could become a target of a TAKEOVER bid.
(Source : AFP)