Shares in Sika AG stocks jumped after a bid for control of the Swiss specialty chemical company by rival Compagnie de Saint-Gobain AG was dropped, ending a drawn-out legal dispute.
Sika shares were up 8.7% as of 5:25 a.m. ET, and Saint-Gobain's stock jumped 2.75% after the deal, under which a 6.97% share in Sika acquired by Saint-Gobain will be cancelled, in a transaction giving Saint-Gobain a €600 million gain.
"This solution is immediately accretive for our shareholders," said Sika Chairman Paul Hälg and CEO Paul Schuler. "The introduction of a modern governance structure will provide Sika with a solid base to accelerate its growth."
"This is a very positive settlement for Saint-Gobain, both from a financial and a strategic perspective," said Saint-Gobain Chairman and CEO Pierre André de Chalendar. "We materialize a substantial positive net result in excess of €600 million for our shareholders."
Sika will call for a June 11 extraordinary shareholders' meeting, at which it will propose to cancel the 6.97% shares through capital reduction and convert all shares into a single class of registered shares.
Sika said Saint-Gobain will retain a 10.75% stake in Sika, through Schenker-Winkler Holding AG, for at least two years.
