Bill Gates’ Swiss shareholder battle signals moves towards global convergence

The Gates’ Foundation Trust and Bill Gates’ personal investment fund, Cascade Investment, are involved in a battle over the sale of a controlling interest in Swiss chemical company Sika. The dispute began in 2014 when the company’s founding family, the Burkards, chose to sell its controlling stake. A proposed deal would have enabled rival firm Saint-Gobain to establish “arm’s-length” arrangements, giving it control of the company without paying for all the shares. The Gates funds, which owned 5% of Sika, combined with Columbia Threadneedle and Fidelity International, are fighting the deal, arguing that the case is about “the rule of law trumping individual greed” and the protection of shareholders. The case may indicate that global investors will seek to implement US and British standards across the world, leading to increased convergence.

Bill Gates’s Foundation Trust and his personal investment fund are locked in a brutal shareholder dispute in Switzerland over the sale of a controlling interest in the Swiss specialty chemicals maker Sika. This is more than just another activist battle, however, showing how things in Europe these days look more and more American.

The fight began in 2014, when the fifth generation of Sika’s founding family, the Burkards, decided to sell its controlling stake. Though the family members owned only 16 percent of the 100-year-old company, their shares had special voting rights giving them a controlling voting interest in the company.

Burkard family members explained they were selling their stake because the younger generations of the family had not been involved in its day-to-day operations for some time. They thought they had found a stable, long-term owner in a Sika competitor, France’s Cie de Saint-Gobain. And it is not hard to see their rationale for selling. The price they received — $2.8 billion — carried an 80 percent premium.

Other shareholders were left in the cold, however. Saint-Gobain announced it would not bid for the shares of Sika that were not being sold by the Burkard family. Instead, it would seek to enter into “arm’s-length” arrangements that would allow Saint-Gobain to control the company and consolidate its earnings and revenue on its books without having to pay for all the shares.