May 11, 2018 / 6:22 AM / 10 months ago

UPDATE 1-Saint-Gobain to take stake in Sika as construction groups end dispute

* Dispute over control of Sika had been raging since 2014

* St Gobain to get large stake in Sika, not majority control (Adds details of deal, background)

PARIS, May 11 (Reuters) - French building materials company Saint-Gobain and Swiss peer Sika said on Friday they had ended their protracted hostile takeover fight with a deal resulting in Saint-Gobain buying a large stake in Sika, but not majority control.

Saint-Gobain will acquire a stake from the Burkard family, heirs to the founder of Sika, for around 3 billion Swiss francs ($3 billion), giving it a 17 percent stake and 52 percent of the company's voting rights.

The French company will then sell a nearly 7 percent stake back to Sika, as well as retire the over-proportional voting rights at an upcoming extraordinary shareholders' meeting.

Saint Gobain will thus retain a 10.75 percent stake in Sika.

The Swiss company will now pay Saint-Gobain about 2.1 billion Swiss francs to cover the cost of the shares.

The deal would lead to a positive net result of 600 million euros for Saint Gobain, and would help the French company continue its general policy of small-to-mid-sized acquisitions, said Saint-Gobain's Chairman and Chief Executive Pierre Andre de Chalendar.

The dispute over control of Sika had been raging since 2014 when Saint-Gobain offered 2.75 billion Swiss francs to buy the founding Burkard family's 53 percent voting stake.

"We are pleased that Saint-Gobain, as a significant Sika customer, is now the company's largest shareholder. The solution agreed between the parties involved taking into account the interests of all shareholders and forms the basis for continuing Sika's success story," said Urs Burkard, spokesman for the Burkard family, in a statement.

The Burkards were seeking to unload their shares for a premium, while Sika's board and investors, including the Bill & Melinda Gates Foundation, had been fighting against the transaction.

The warring sides had thus been locked in a stalemate, in what had become an expensive battle in the courts and a rare example of Swiss corporate enmity that had entered into the public domain.

"The primary concern of the family has always been to ensure Sika's success and long-term prosperity," Burkard added.

$1 = 1.0032 Swiss francs Reporting by Sudip Kar-Gupta in Paris and John Miller in Zurich; Editing by Sunil Nair and Sherry Jacob-Phillips

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