French conglomerate Saint-Gobain plans to acquire a controlling interest in Swiss chemical company Sika AG, which specializes in the development and production of systems and products for bonding, sealing, damping, reinforcing and protecting in the building sector and automotive industry. However, the Sika board and management team say they are opposed to the move and will “resign following closing of the transaction,” according to a company statement.

The transaction involves the purchase of Schenker Winkler Holding AG, owner of 16.1 percent of Sika’s capital and 52.4 percent of its voting rights, for $2.84 billion (CHF 2.75 billion), according to Saint-Gobain.

“The board and group management of Sika AG have neither been involved nor consulted in connection with the proposed transaction,” Sika’s statement reads. “The board and group management do not support the change of control of Sika to Saint-Gobain. The board neither sees the industrial logic in the transaction, nor significant synergies for Sika. Furthermore, the board and the group management believe that shareholder value would be impaired as Sika in the planned set-up would not be able to continue its successful growth strategy. Sika’s ownership structure is unique. For historic reasons the Burkard family was able to control Sika with only 16 percent share in the capital. Eighty-four percent is owned by public shareholders, which will not receive an offer for their shares. The trust of these shareholders has relied on the repeated public commitment of the family to act as Sika’s anchor shareholder and accompany the group in the best interest of all shareholders.

“The intended transaction would bring a fundamental change. Unlike the family, Saint-Gobain is an industrial investor and numerous conflicts to the detriment of the public shareholders could arise,” the statement continues. “The non-conflicted board members and the group management each independently have come to the conclusion that if the transaction materializes they are no longer in a position to serve in the best interest of the company and all its stakeholders. They have therefore decided to resign following closing of the transaction.”

Saint-Gobain also plans to launch a competitive process for the sale of Verallia, a glass packaging company that employs approximately 10,000 people and has industrial plants in 13 countries.

“The two transactions—the plan for which we are announcing today (December 8)—will accelerate the group’s strategic refocus on the design, production and distribution of innovative, high-performance solutions for habitat and industry,” says Pierre-André de Chalendar, chairman and CEO of Saint-Gobain. “The transactions meet the objectives we announced in November 2013 to raise the growth potential and reduce the capital intensity of our businesses, increase our presence in emerging countries and in the U.S., and expand our range of differentiated products supported by strong brands. We are looking forward to working with Sika to enhance the growth potential of this excellent business.”

Following the acquisition of Sika, Saint-Gobain plans to fully consolidate the company in its accounts. Saint-Gobain insists it does not intend to launch an offer for Sika’s remaining shares and “has full confidence in the company to continue developing the business.”

Sika employs more than 16,000 people in 84 countries and reported $5.316 billion (CHF 5.142 billion) in sales in 2013. The company has shown average annual growth greater than 8 percent between 2007 and 2013. Thirty-eight percent of its sales are made in emerging countries.

Saint-Gobain expects the deal to generate  $124 million (100 million euros) in synergies in the first three years and $224 million (180 million euros) per year beyond 2019.

The transaction is subject to clearance from anti-trust authorities and is expected to be finalized by the second half of 2015.

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