French conglomerate Saint-Gobain’s deal to acquire a controlling interest in Swiss specialty chemical company Sika AG might not be going forward anytime soon.

On Monday, the Sika Board of Directors resolved to reduce the Burkard’s family voting rights in the company to 5 percent. The Saint-Gobain deal hinged on the Burkard’s family’s agreement to sell Schenker Winkler Holding AG to Saint-Gobain. The family-owned company controls 16.1 percent of Sika’s capital and 52.4 percent of its voting rights, which would have paved the way for Saint-Gobain to gain controlling interest in Sika.

The decision by Sika’s board won’t take effect until it’s confirmed by a Swiss commercial court, according to the Wall Street Journal.

“After closely analyzing the claim made by Schenker-Winkler Holding AG (SWH) to convene an early extraordinary general meeting, the board of directors of Sika AG yesterday made the following decisions: Burkard/SWH’s voting rights are restricted to 5 percent and the right to convene extraordinary general meetings has been removed,” according to a Sika statement.

“In the view of the board of directors, the voting rights held by the Burkard family/SWH should be restricted to the statutory 5 percent limit. The Burkard family/SWH forms a group with Saint-Gobain and therefore exercises their voting rights at general meetings in accordance with Saint-Gobain’s instructions. The Federal Supreme Court has repeatedly ruled that such arrangements are an inadmissible circumvention of statutory voting restrictions,” officials write in the statement.

Meanwhile, Saint-Gobain officials fired back with their own statement, writing, “Saint-Gobain has taken notice of the acts of the board of directors of Sika. Saint-Gobain is advised by its legal counsel that those actions are clearly against all corporate law and governance principles in Switzerland.”

The Burkard family has a long history with Sika, which is why the company held such a high voting privilege with just 16.1 percent of the capital “This exceptional privilege is solely attributable to the Burkard family’s close association with Sika, which stretches back more than a century and its repeated public assertions of its intention to retain this close association and to protect the company against takeovers. Now that the Burkard family/SWH have formed a group with Saint‐Gobain, this historical privilege must be considered lost, together with the right to convene extraordinary general meetings,” according to Sika’s statement.

Furthermore, Sika’s board reports that shareholders representing more than 35 percent of the company’s total capital have given “their assurance to support the board of directors and management in their efforts to safeguard the interests of Sika and its stakeholders. This is more than double the capital held by the Burkard family,” Sika’s board writes in a statement.

The Burkard family filed a lawsuit earlier this month to push through the Saint-Gobain deal.

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