May 10, 2018 / 10:59 PM / in 7 months

Saint-Gobain, Sika reach deal to end bitter fight: FT

ZURICH (Reuters) - French building materials company Saint-Gobain (SGOB.PA) is set to take a large stake in Switzerland’s Sika AG SIK.S while abandoning its quest for control, the Financial Times reported on Thursday, in a deal that would end a nearly four-year-old hostile takeover.

FILE PHOTO: The Saint-Gobain logo is seen on the company headquarters building at the La Defense business district in Courbevoie, outside Paris, France, February 19, 2018. REUTERS/Gonzalo Fuentes/File Photo

Saint-Gobain and Sika, which makes construction materials and adhesives for the automobile industry, are set to unveil a complex pact as early as Friday, the FT said, citing people close to the matter who said the pact was not yet finalised.

The proposal calls for Saint-Gobain to acquire a stake belonging to the Burkard family, heirs of Sika’s founder, for around 3 billion Swiss francs, giving it a 17 percent stake and 52 percent of the company’s voting rights.

The French company would then sell a 7 percent stake back to Sika, as well as retire the overproportional voting rights at an upcoming extraordinary shareholder meeting, the FT said.

Sika will pay Saint-Gobain 2 billion Swiss francs to cover the cost of the shares and the pledge to simplify the company’s voting structure to one share, one vote, the FT reported.

The Burkard family through its lawyer Urs Schenker could not be reached for comment.

Neither Saint-Gobain nor Sika could be reached for comment late on Thursday.

The dispute over control of Sika has been raging since 2014 when Saint-Gobain offered 2.75 billion Swiss francs to buy the founding Burkard family’s 53 percent voting stake.

Sika’s board objected, and the warring sides have been locked in a stalemate ever since in what has become an expensive battle in the courts and a rare example of Swiss corporate enmity that has bled into the public eye.

The Burkards have favored the French offer, while Sika’s board and investors including the Bill & Melinda Gates Foundation have been fighting it, in part on grounds it violates corporate governance principles by giving Saint-Gobain control without having to offer the same terms to all shareholders.

Without an agreement, the case could occupy Swiss courts for years to come.

The agreement described by the FT would allow Saint-Gobain to make a profit while keeping around 10 percent of Sika shares.

The Burkard family, descendants of Sika founder Kaspar Winkler, would exit the company, the newspaper reported.

Reporting by John Miller; Editing by Cynthia Osterman

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