French building materials firm Cie de Saint-Gobain may soon be able to focus all its energy on the battle to take over Swiss chemicals maker Sika after moving a step closer to selling glass-packaging unit Verallia.

Saint-Gobain entered exclusive talks with Apollo Global Management to sell the business for €2.95 billion, the company stated yesterday. It has already sold the North American part of the unit to Ardagh as chief executive Pierre-André de Chalendar focuses on the building materials market.

“They are unlocking a bit of hidden value” because the Verallia proceeds are “a bit higher than expected,” said Arnaud Palliez, an analyst at Raymond James in Paris. “It will free up management resources for Sika, and will help fund the Sika transaction.”

While the purchase of Sika would be the next step in Saint- Gobain’s transformation, Mr de Chalendar faces a legal battle to take control of the adhesives maker as its management is resisting the deal.

In December, Saint-Gobain agreed with Sika’s founding family to buy its 16 per cent stake, carrying 52 per cent of the voting rights, for 2.75 billion Swiss francs (€2.6 billion).

Sika’s management and smaller investors are opposing the deal, claiming it makes no strategic sense and hands the Burkard family an 80 per cent premium while other shareholders get nothing.

The decision by descendants of Sika founder Kaspar Winkler to exit the business has spawned an acrimonious battle in court and the media, with actions between the family and Saint-Gobain on one side, and Sika management and shareholders, including Threadneedle Investments, on the other.

Verallia, which makes glass bottles and jars, operates 47 plants in 13 countries and last year had sales of €2.4 billion. The unit attracted five bids and Apollo’s offer values the business at 7.4 times earnings before interest, taxes, depreciation and amortisation.

– Bloomberg