Board Chairman, Board Members, Shareholders, Ladies and Gentlemen,   

I am Choong Fee Chong, General Manager of Sika LCS Optiroc Singapore, and Head of Building Mortar, Asia-Pacific, with almost 35 years of experience in the cement and mortar industry in the region. As one of the founding owners of LCS Optiroc, I was closely involved in Sika’s successful acquisition of LCS Optiroc in 2014. 

With that in mind, I would like to share two key ingredients to a successful acquisition, drawing from my experience in 2014:

  1. prudent due diligence must be carried out; and 
  2. the M&A must generate value.   

Let me first cover prudent due diligence. With every successful acquisition, there needs to be a competent team in place, to evaluate the potential deal, and this is more than simple math. A proper due diligence encompasses all aspects - financial, operational, legal, technology and even people. And when done properly, due diligence should test the strategic fit of an acquisition. 

Sika’s acquisition of LCS Optiroc Pte ltd was the perfect example of prudent due diligence. There were long and extensive discussions with Sika’s acquisition team and group management including Jan Janish and Heinz Gisel. All aspects were covered in detail, and communication was two-way and bilateral. 

The proposed acquisition of Sika by Saint Gobain, on the other hand, is quite the opposite. Hardly any due diligence was carried out and there was no clear, two-way conversation being carried out with Sika’s group management and the board.   

Let me now move on to my second point – value generation. A successful acquisition generates value. Sika understood what it was doing with its business, where it wanted to go, and what it valued most. And because of this, their acquisition of LCS Optiroc paid off handsomely.   LCS Optiroc, under the strong leadership of the senior management team led by Heinz Gisel, Regional Manager of Asia Pacific, saw the company achieving double digit growth in both sales revenue and ebit last year.   

Saint Gobain’s proposed acquisition of Sika goes against this simple concept of value generation. It is the complete opposite of a proper and good business take-over which will and can result in many adverse consequences for Sika, all its employees and its majority shareholders.   

In the Asia-Pacific region, Saint Gobain operates in the building mortar businesses and competes with Sika in Thailand, Malaysia, Vietnam and Indonesia. Building mortar business is an important element of Sika Strategy 2018 and is identified as a new engine of growth for Sika in the coming years. Sika has also successfully acquired companies in the building mortar business in Asia-Pacific as part of its Strategy 2018.   

Strategy 2018 has been immensely successful for Sika and we are seeing Sika growing from strength to strength in all markets and establishing itself as a strong market leader in the mortar markets. There is clearly no industrial and business logic for Saint Gobain to take-over Sika, and Sika clearly does not need Saint Gobain. Sika has performed strongly and have outperformed all of its competitors over the last few years and it should continue along this successful path, made possible by its 17,000 global employees, and endeavour towards creating more value for our shareholders.   

Thank you.