SGO Cie de SaintGobain

By John Revill

ZURICH0--Construction and automotive chemicals maker Sika AG's (SIK.VX) strongest-ever annual earnings strengthens its opposition to a $2.78 billion hostile takeover by French rival Saint-Gobain AG (SGO.FR), the chairman of the Swiss company said Friday.

Baar-based Sika has been embroiled in a takeover battle for more than a year after Saint-Gobain offered to buy the controlling stake held by Sika's founding family without making an offer to other shareholders, which include billionaire Bill Gates.

"I am very pleased that these strong results support our defense of Sika against Saint-Gobain," said chairman Paul Halg.

He said the results showed that Sika's business hadn't been damaged by the "difficult situation" with Saint-Gobain, that Sika could be successful as an independent company, and didn't need Saint-Gobain.

"The way we have organized ourselves means we can work in this way for a long time," Mr. Halg said. Sika was prepared to continue resisting Saint-Gobain for as long as it takes, he said.

The takeover sparked fierce opposition because Paris-based Saint-Gobain has proposed only to buy the 16% stake held by Sika's founding Burkard family for 2.75 billion Swiss francs ($2.78 billion). Buying the family's investment vehicle gives control of Sika as it has 52% of the voting rights in the Swiss company.

Sika's management has responded by limiting the family's voting rights to 5%, a move that is now being disputed in Swiss courts with a decision expected this summer.

Earlier Friday, Sika reported a 5.4% rise in net profit for 2015 of CHF465.1 million ($469.8 million) in the 12 months to Dec. 31 from CHF441.2 million a year earlier, beating analyst expectations of CHF455 million.

Sales dipped 1.5% to CHF5.49 billion from CHF5.57 billion in 2014, slightly ahead of analyst expectations of CHF5.47 billion, as the highly valued Swiss franc took a toll.

A spokesman for Cascade Investment LLC, the investment vehicle controlled by Bill and Melinda Gates, said they continued to "fiercely oppose" a Saint-Gobain takeover.

"There needs to be a solution that fits all the investors and not just members of one family, and we would like Saint-Gobain walked away," the spokesman said.

This looks unlikely with Saint-Gobain repeating its commitment to the deal.


"We are both patient and committed to completing the Sika transaction," said Saint-Gobain CEO Pierre-Andre de Chalendar as the Paris company reported its full-year earnings on Thursday.

Write to John Revill at john.revill@wsj.com

(END) Dow Jones Newswires

February 26, 2016 04:56 ET (09:56 GMT)

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