Sources: Sika AG, Baar, Switzerland; Saint-Gobain, Paris; CP staff
A year after an initial overture and subsequent Swiss agency and European Commission legal proceedings, Sika AG management remains steadfastly opposed to a stock transfer to global glass and building materials giant Saint-Gobain. Sika Chairman Dr. Paul Hälg calls the transaction “unparalleled in the world” and reiterates board concerns rooted in the bid’s structure: Saint-Gobain seeks the stake of the largest shareholder—the Burkhart family—amounting to 16.1 percent of shares, but vested with 52.4 percent of voting rights.
In an early December letter to shareholders, he noted:
- The transaction lacks any industrial logic and claimed synergies are not realistic. A legal integration of the businesses is not permitted since Saint-Gobain would acquire only a minority stake in Sika’s capital. Any cooperation would need to comply with complicated agreements based on arm’s-length terms, increasing administrative complexity while undermining Sika’s efficient line management and clear allocation of profit & loss responsibility.
- Despite ownership of 84 percent of Sika capital, public shareholders would no longer have adequate board representation, as Saint-Gobain wants to appoint the majority of the members and the chairman—marking a fundamental change in Sika’s corporate governance and contradicting Saint-Gobain’s claim to leave Sika independent.
- Current legal proceedings center on whether a transfer restriction in Sika’s articles of association applies to the majority shareholder’s sale of its capital stake. The board is convinced the articles require director approval of any transfer exceeding 5 percent of registered shares.
- Saint-Gobain is a direct competitor of Sika in the mortar business; conflicts of interest are inevitable because the former would own only 16 percent of the capital. Having full control over the Sika board, Saint-Gobain would have an overriding interest to solve such conflicts to its advantage.
Dr. Hälg credits Sika’s “highly motivated employees and the unique spirit that drives them” for approaching 2015 with a “business as usual” attitude. That has netted significant volume and market share increases in all regions the first nine months of the year, along with 5.5 percent sales growth and 9 percent profit rise. “Backed by the support from employees and shareholders and driven by the deep conviction that the intended transaction would ultimately destroy Sika’s success story, the non-conflicted Board members will continue to oppose the intended transaction,” he concludes.