Sika remains juicy takeover target

Sika CEO Jan Jenisch is confident about the company's future Keystone

Swiss specialty chemicals manufacturer Sika demonstrated again why it is such an alluring target for a hostile takeover by posting a 22% rise in net profits for 2016 and upwardly revising its strategic targets for the next few years.

On Friday, Sika announced record annual sales of CHF5.7 billion (up 5.5% on 2015) and profits of CHF567 million. The family-owned business said it has already outstripped its 2018 growth targets.

However, the family descendants of Sika’s founder are still intent on selling their 53% voting rights to French industrial conglomerate Saint-Gobain. If they succeed in the contentious sale of their shares, Sika would fall under Saint-Gobain’s control.

The French heavyweight company, which posted full year sales of €39 billion (CHF41.5 billion), reiterated on Thursday that it still had its sights set on Sika. Contained in the notes of its financial statement, Saint-Gobain said it could wait until the end of 2018 for the resolution of an ongoing legal battle in Switzerland concerning the takeover.

The family owners of Sika, represented by their vehicle Schenker-Winkler Holding (SWH), is appealing a Zug court decision from October that upheld the Swiss company’s tactics in opposing the deal. Sika’s board are objecting to the takeover on the grounds that it was not consulted about negotiations and that a Saint-Gobain takeover would damage the company’s interests.

At a media presentation of Sika’s annual results on Thursday, company chief executive Jan Jenisch declined to comment on the takeover tussle.

Battle lines between Sika’s board and family owners will resume at the company’s annual general meeting on April 11. At the previous two AGMs, Sika’s board has controversially restricted SWH’s voting rights when it comes to electing directors. This tactic has blocked SWH from throwing out dissenting directors and replacing them with takeover-friendly personnel.

In the meantime, Sika keeps growing in all global markets, especially North America where sales rose 7.8% last year. Jenisch told journalists that the United States would be a key market after the election of President Donald Trump.

Sika could benefit from Trump’s infrastructure spending plans, including the proposed wall between the US and Mexico. “If Trump does actually build the wall, in whatever form it may take, then we would like to be involved,” Jenisch said.