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Strategic drivers for sustainable growth Allocating resources efficiently to drive Group performance

Active management of the portfolio of activities 1.2

There are three complementary strands to the strategy of acquiring small and medium enterprises.

hedged in euros), of Schenker Winkler Holding AG (SWH) which, at December 31, 2017, held 16.97% of Sika’s share capital and 52.92% of its voting rights. After the acquisition, the Saint-Gobain Group will be able to incorporate Sika into its financial statements by global consolidation, with a positive impact on net income from year one. This plan is fully in line with Saint-Gobain’s strategic objectives: improving growth potential, lower capital intensity, presence in fast-growing countries and product differentiation. Given the deal's strong industrial rationale, as a result of complementary technology and products, customer portfolios and markets, this deal will generate synergies from year four following its completion, to be shared between the two groups. Saint-Gobain intends to pursue Sika’s development in a way that is respectful of Sika’s business culture, image and roots. Thus, Sika will maintain its integrity while retaining its current headquarters, its brand, and its listing on the Swiss Stock Exchange. Saint-Gobain renews its support to Sika’s 2018 strategy and its intent not to undertake any restructuring linked to the transaction within the two years following the completion of the transaction. Completion of this deal is subject to clearance from the competent anti-trust authorities, which were all obtained on December 2, 2015. Further, on August 27, 2015, the Swiss Federal Administrative Court confirmed in last resort the validity of the opt-out clause provided in Sika’s bylaws exempting Saint-Gobain from launching a mandatory takeover bid following the acquisition of the SWH shares. Saint-Gobain and its Board of Directors took note of the ruling handed down by the Cantonal Court of Zug on October 28, 2016, which rejected SWH’s demand for cancellation of the resolutions passed by the Annual General Meeting of Sika on April 14, 2015 for which SWH's voting rights had been restricted, and SWH’s appeal to the Zug Supreme Court against this decision. Saint-Gobain had anticipated these decisions by being granted the option to extend the term of the purchase agreement with the Burkard family relating to the disposal of SWH shares. Saint-Gobain exercised its rights, extending the agreement several times, with the most recent extension, in October 2017, taking its term to June 30, 2018. As of this date, Saint-Gobain will once again have the option to extend the term of the agreement until December 31, 2018. These successive extensions of the purchase agreement demonstrate the alignment between the Burkard family and Saint-Gobain and their unwavering determination. With the support of its Board of Directors, Saint-Gobain is determined to successfully complete its plan to acquire a controlling stake in Sika, an industrial project that will create value for all stakeholders. Pending the decision of the Zug Supreme Court, which is expected early 2018, Saint-Gobain is confident that the Swiss justice system will restore SWH’s ownership rights.

Make local acquisitions The Group is continuing its policy of local acquisitions to strengthen its position in those countries where it already has a presence. In that respect, Saint-Gobain has become the largest Building Distribution network in Brazil through the acquisition of Tumelero. Acquisitions in Sweden, France and the United Kingdom have helped the Building Distribution Sector to establish its position In Europe and develop its portfolio of activities; one such acquisition is that of Scotframe, the Scottish market leader in kits for prefabricated houses. The Construction Products Sector is also increasing its presence in Scandinavia with the acquisition of Glava, a major player in insulation in Norway. Increasing Group penetration in fast-growing countries through new geographic locations During the year, the Group invested in companies operating in fast-growth economies. The Construction Products Sector expanded its industrial setup in Southern Africa through the acquisition of Buildezee Adhesives Botswana, the leading local producer in the mortar and tile adhesives market. This acquisition confirms the Group’s determination to capitalize on the momentum of Sub-Saharan Africa where it already has a presence in Tanzania and South Africa. Similarly, the acquisition of Tekbond, number two in adhesives in Brazil, reflects the High-Performance Materials Sector’s strategy of developing innovative solutions in fast-growing markets. Expanding the portfolio of activities Saint-Gobain acquires companies offering solutions that complement the Group’s own and have high growth potential. These acquisitions involve both niche technology companies and companies with innovative business models that take advantage of the move to digital to target end-users. The acquisitions in Germany of adhesive tape manufacturer Biolink and reinforcements specialist Kirson underline the High-Performance Materials Sector’s commitment to developing solutions in adjacent markets, to offer its customers a wide range of solutions and take positions today in the markets of the future. To the same end, the Building Distribution Sector acquired start-ups, like Tolteck in France, that offers an ergonomic tool for building trade customers undertaking renovation projects. The software helps them handling quotations and invoicing.

The Group’s total acquisitions in 2017 represent full-year consolidated net sales of over €550 million.

Further, Saint-Gobain is continuing its plan to acquire a controlling interest in Sika, a leading construction chemicals company. The plan consists of the acquisition by Saint-Gobain, for 2.83 billion Swiss francs (an amount fully

Saint-Gobain made disposals in 2017 totaling over €210 million, selling off Vemac in the Building Distribution Sector in Italy and Finglass in the Flat Glass Sector in Finland.

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