Swiss chemicals company Sika has agreed to buy French rival Parex in a 2.5 billion Swiss franc (US$2.6 billion) deal, the latest in a wave of consolidation in the construction materials sector.
Sika’s planned purchase of Parex from private equity firm CVC Capital Partners will double the size of its mortars business and generate as much as 100 million francs (US$101.9 million) in savings, as well as boosting earnings in the first full year of ownership, the company stated on Tuesday, January 8.
The deal sent Sika shares tumbling as much as 4.2% in Zurich. Although the deal looks expensive at first glance, expected synergies appear reasonable and will bring down the valuation, Baader Bank analyst Markus Mayer wrote in a note.
Full Content: Bloomberg
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