Paul Hälg, chairman of Sika's board of directors, speaks during the company's AGM in April
Keystone
Swiss chemicals manufacturer Sika and French building materials company Saint-Gobain have reached an agreement to end an almost four-year legal dispute, which will result in Saint-Gobain acquiring a large stake in Sika.
This content was published on
3 minutes
SDA-ATS/ts
The complex deal will see Saint-Gobain acquiring all outstanding shares of Schenker-Winkler Holding (SWH) from the Burkard family, heirs to the founder of Sika, for a purchase price of CHF3.22 billion ($3.21 billion), Sika said in a statementExternal link on Friday. Following the settlement, Sika’s share price increased by 8.3% by the end of the day.
The dispute
The dispute over control of Sika has been raging since 2014 when Saint-Gobain offered CHF2.75 billion to buy the Burkhard’s controlling stake – comprising just 16% of the share capital but 53% of voting rights.
Sika’s board objected, and the warring sides were locked in a stalemate in what became an expensive battle in the courts and a rare example of Swiss corporate enmity spilling into the public eye.
The Burkards favoured the French offer, while Sika’s board and investors, including the Bill & Melinda Gates Foundation, fought it, in part on grounds it violated corporate governance principles by giving Saint-Gobain control without having to offer the same terms to all shareholders.
To get around this board rebellion, all the Burkards had to do was replace them with more pliable directors at Sika’s AGM in 2015. But Sika slapped a 5% restriction on the Burkard vote when it came to the election of board members. This continued at the 2016, 2017 and 2018 AGMs.
This reflects an increase of more than CHF500 million from the purchase price agreed in December 2014 between Saint-Gobain and the Burkard Family, which takes into account the increase in Sika’s value since 2014, Sika said.
Saint-Gobain and SWH have also agreed to sell a 6.97% stake in Sika back to Sika for CHF2.1 billion, with Saint-Gobain retaining a 10.75% stake in the Swiss company via the holding company for a minimum of two years.
Sika plans to hold an extraordinary shareholders meeting on June 11 to establish a new unitary share class.
It added that all pending litigation would be terminated.
‘Success story’
All sides said on Friday they were happy with the deal.
“The board and group management of Sika welcome this positive outcome. This solution paves the way for a new chapter of our success story,” said Paul Hälg, chairman of the Sika board of directors, and CEO Paul Schuler in a statement.
Urs F. Burkard, spokesman for the Burkard family, said: “We are pleased that Saint-Gobain, as a significant Sika customer, is now the company’s largest shareholder. The solution agreed between the parties involved takes into account the interests of all shareholders and forms the basis for continuing Sika’s success story. The primary concern of the family has always been to ensure Sika’s success and long-term prosperity.”
“This is a very positive settlement for Saint-Gobain, both from a financial and a strategic perspective,” said Pierre André de Chalendar, chairman and CEO of Saint-Gobain. “We materialise a substantial positive net result in excess of €600 million (CHF716 million) for our shareholders. We also retain a minority stake in a great company and will enhance the relationship between the two groups.”
More
More
Sika stand-off with family heirs continues unabated
This content was published on
At Tuesday’s AGM, the family heirs of Sika’s founder faced a familiar pattern of having their votes restricted when it came to electing board members. As a result, chairman Paul Hälg was re-elected along with other board members hostile to the proposed Saint-Gobain takeover. The four-year battle between the Burkard family, who control the majority…
Bodycams: essential for good law enforcement, or a privacy risk?
Did you ever come across bodycams in your place of residence and if so, how do you think the use of bodycams alter the relationship between the public and (transport) police?
This content was published on
Swiss wheelchair racer Catherine Debrunner won the 5,000 metres to bring home Switzerland’s first gold medal at the Paralympics in Paris.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Swiss firms face greater shareholder opposition
This content was published on
Shareholder rebellion over executive pay at Credit Suisse earlier this year is just one example of growing dissent by Swiss company owners.
This content was published on
The court ruling, made public on Friday, has compromised the proposed takeover by preventing the Burkard family from selling their 53% voting rights, via their holding company Schenker-Winkler Holding (SWH), without prior approval from the Sika board. However, the family said it would appeal to a higher court. The court also upheld Sika’s right to…
This content was published on
Sika’s largest shareholder has again been controversially denied the chance of electing a takeover-friendly board at the firm’s AGM.
Sika clash is more than just an acrimonious takeover battle
This content was published on
The words “building trust” are written in large letters above the reception desk at the research and production facilities of Sika, the Swiss chemicals group, on the banks of Zurich’s Limmat river
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.