28th Jul 2006 12:04
Compagnie de Saint-Gobain28 July 2006 July 27th, 2006 pressrelease Owens Corning & Saint-Gobain Announce Intent to Merge Reinforcements Businesses Customers benefit from improved technology, expanded product range and geographic reach Creates focused and efficient business with world-class technology and products Establishes strong global company with $1.8 billion (€1.5 billion) in annual sales Toledo, Ohio, USA and Paris, France, July 27, 2006 - Owens Corning andSaint-Gobain jointly announced today that they are in discussions to merge OwensCorning's Reinforcements Business and Saint-Gobain's Reinforcement andComposites Businesses (a part of the entity known as Vetrotex) into a newcompany, to be called Owens Corning-Vetrotex Reinforcements. The partnership ofthese two businesses would establish a global company in reinforcements andcomposite fabrics products, with worldwide revenues of approximately $1.8billion (€1.5 billion) and 10,000 employees. The new company would haveoperations across Europe, North and South America, and Asia, including thefollowing 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. OwensCorning's Veil Technologies and Fabwel businesses will remain part of the OwensCorning Composite Solutions Business. A Customer Focused Enterprise Owens Corning-Vetrotex Reinforcements would bring together two pioneers in thereinforcements and composite fabrics industry, each with long histories ofproduct innovation and customer focus. Owens Corning-Vetrotex Reinforcements would provide outstanding service to itscustomers as a result of improved geographic scale, an expanded product base andcombined technological expertise. The new company would better serve bothregional and global customer needs by taking advantage of new world-classtechnologies and innovative products, and improved logistics, productivity andsupply efficiency. The new company and its customers would also benefit fromaccess to greater financial and human resources. The new company would have a strengthened presence in both developed andemerging markets. This broad geographic presence would lead to more security ofsupply and reduced shipping time for current and future customers. OwensCorning-Vetrotex Reinforcements would participate more effectively in today'sincreasingly competitive marketplace. "This is an exciting opportunity for Owens Corning, our customers and ouremployees," said Dave Brown, President and Chief Executive Officer of OwensCorning. "It demonstrates our commitment to the composites business and ourcustomers 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 companyis an excellent project. It would enable us to better serve our customers andensure a promising future for our Reinforcement and Composites business and itsemployees." Structure and Financial Impact While the parties have not yet reached a definitive agreement, it is anticipatedthat the transaction would be structured as a joint venture, with Owens Corningowning a 60 percent equity interest and Saint-Gobain owning the remaining 40percent. After a minimum of four years, the joint venture provisions would givean option to Saint-Gobain to sell its 40 percent stake to Owens Corning, andOwens Corning to buy the same. On a pro forma basis, the new company would have approximately $1.8 billion(€1.5 billion) in annual revenues. The Owens Corning-Saint-Gobain joint venturewould present significant opportunities for synergies. These are expected tocome primarily from scale benefits in purchasing and procurement; operationaland technological plant improvements; improved distribution costs; reducedadministrative costs; and asset management optimization. The transaction is expected to close by early 2007 and is subject to thenegotiation and execution of definitive transaction documents, Board ofDirectors approval by the parent companies, and regulatory and antitrustapprovals. Leadership and Operations Owens Corning-Vetrotex Reinforcements would be headquartered in Toledo, Ohio,and would maintain leadership offices in key locations around the world. TheBoard of Directors for the new company would be comprised of threerepresentatives from Owens Corning and two from Saint-Gobain. The ChiefExecutive Officer of Owens Corning-Vetrotex Reinforcements would be Chuck Dana,currently President of Owens Corning's Composite Solutions Business. The neworganization would be managed by an executive management team comprised of keyleaders from Owens Corning and Vetrotex. About Owens Corning Owens Corning is a world leader in building materials systems and compositesolutions. A Fortune 500 company for more than 50 years, Owens Corning peopleredefine what is possible each day to deliver high-quality products and servicesranging from insulation, roofing, siding and manufactured stone veneer, to glasscomposite materials used in transportation, electronic, telecommunications andother high-performance applications. Since the company's founding in 1938, OwensCorning has become a market-leading innovator of glass fiber technology withsales of $6.3 billion in 2005 and 20,000 employees in 26 countries. Additionalinformation is available at www.owenscorning.com. About Saint-Gobain Saint-Gobain Group specializes in the design, production and distribution offunctional materials for the construction, industrial and consumer markets. TheGroup is organized into five business sectors: Flat Glass, Packaging,Construction Products, Building Materials Distribution, and High-PerformanceMaterials. Established in more than 50 countries, Saint-Gobain is the market leader in eachof its core businesses. In 2005, it achieved more than €35 billion sales witharound 200,000 employees. Investor Relations Department Mrs Florence TRIOU-TEIXEIRA Tel.: +33 1 47 62 45 19 Mr Alexandre ETUY Tel.: +33 1 47 62 37 15 Fax: +33 1 47 62 50 62 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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