28 July 2006
28 July 2006
Owens Corning and Saint-Gobain are in discussions to merge Owens Corning’s Reinforcements Business and Saint-Gobain’s Reinforcement and Composites Businesses (a part of 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 (€1.5 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.
Saint-Gobain’s Textile Solutions business, serving mainly construction markets, will remain part of Saint-Gobain’s High Performance Materials Sector. Owens Corning’s Veil Technologies and Fabwel businesses will remain part of the Owens Corning Composite Solutions Business.
According to the companies, Owens Corning-Vetrotex Reinforcements would provide service to its customers as a result of improved geographic scale, an expanded product base and combined technological expertise.
“This is an exciting opportunity for Owens Corning, our customers and our employees,” said Dave Brown, President and Chief Executive Officer of Owens Corning. “It demonstrates our commitment to the composites business and our customers on every continent. We plan to combine the best of both companies, grow with our customers, and deliver strong operating results.”
The Saint-Gobain Group President, Jean-Louis Beffa said, “The combined company is an excellent project. It would enable us to better serve our customers and ensure a promising future for our Reinforcement and Composites business and its employees.”
Owens Corning-Vetrotex Reinforcements would be headquartered in Toledo, Ohio, and would maintain leadership offices in key locations around the world. The Board of Directors for the new company would be comprised of three representatives from Owens Corning and two from Saint-Gobain. The Chief Executive Officer of Owens Corning-Vetrotex Reinforcements would be Chuck Dana, currently President of Owens Corning’s Composite Solutions Business. The new organization would be managed by an executive management team comprised of key leaders from Owens Corning and Vetrotex.
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. The deal is expected to close by early 2007.