Sika Is Said to Explore Asset Sales After $6 Billion MBCC Deal

(Bloomberg) -- Sika AG is considering divesting assets, including some U.S. admixtures operations, to win regulatory approval for its $6 billion acquisition of German rival MBCC Group, people familiar with the matter said. 

The Swiss building materials company is working with advisers at Bank of America Corp. as it studies potential disposals to reduce overlaps between the two companies, the people said, asking not to be identified as the information is private. 

Based on a preliminary analysis, Sika may need to divest operations with combined annual sales of about 150 million Swiss francs ($163 million), one of the people said. It is weighing the sale of some admixtures businesses that could fetch as much as 400 million francs, according to the person. 

Sika makes sealants, mortars and other building adhesives. It said in November it will buy MBCC, the former construction chemicals business of BASF SE, from private equity firm Lone Star Funds. 

The company is still determining the scope of the asset sales, and a formal process would likely start next year, the people said. Deliberations are in the early stages, and there’s no certainty they will lead to a transaction, the people said. 

Representatives for Sika and Bank of America declined to comment. 

Sika has been stepping up its pace of dealmaking as Chief Executive Officer Thomas Hasler seeks to tap demand for new materials supporting sustainability and the shift to electric vehicles. The MBCC transaction ranks as its largest-ever deal, and it’s announced at least seven other acquisitions this year, according to data compiled by Bloomberg. 

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