Owens Corning & Saint-Gobain Announce Intent to Merge Reinforcements Businesses

01-Aug-2006

Owens Corning and Saint-Gobain jointly announced that they are in discussions to merge Owens Corning's Reinforcements Business and Saint-Gobain's Reinforcement and Composites Businesses (a part of the entity known as Vetrotex) into a new company, to be called Owens Corning-Vetrotex Reinforcements. The partnership of these two businesses would establish a global company in reinforcements and composite fabrics products, with worldwide revenues of approximately $1.8 billion (EUR1.5 billion) and 10,000 employees. The new company would have operations across Europe, North and South America, and Asia, including the following key emerging markets: China, India, Russia, Mexico and Brazil.

While the parties have not yet reached a definitive agreement, it is anticipated that the transaction would be structured as a joint venture, with Owens Corning owning a 60 percent equity interest and Saint-Gobain owning the remaining 40 percent. After a minimum of four years, the joint venture provisions would give an option to Saint-Gobain to sell its 40 percent stake to Owens Corning, and Owens Corning to buy the same.

On a pro forma basis, the new company would have approximately $1.8 billion (EUR1.5 billion) in annual revenues. The Owens Corning-Saint-Gobain joint venture would present significant opportunities for synergies. These are expected to come primarily from scale benefits in purchasing and procurement; operational and technological plant improvements; improved distribution costs; reduced administrative costs; and asset management optimization.

The transaction is expected to close by early 2007 and is subject to the negotiation and execution of definitive transaction documents, Board of Directors approval by the parent companies, and regulatory and antitrust approvals.

https://www.chemeurope.com/en/news/56721/owens-corning-saint-gobain-announce-intent-to-merge-reinforcements-businesses.html