By Francois de Beaupuy
France-based Saint-Gobain is seeking $5.4 billion in acquisitions as Europe’s biggest supplier of building materials tries to expand into higher-margin businesses and new emerging markets.
The company aims to have two-thirds of what it calls its innovative materials and construction products in markets outside western Europe, Saint-Gobain said Wednesday in a news release, referring to its financial goals for the 2013-2018 period.
To avoid a cut of its credit rating, the French company also seeks additional cost savings of $1 billion by 2015.
Saint-Gobain Chief Executive Officer Pierre-Andre de Chalendar has been cutting costs and selling businesses to adjust to the European car and construction slump that has hurt demand for flat glass and building materials and put the company’s credit rating under pressure. Moody’s Investors Service and Standard & Poor’s, which rate Saint-Gobain at Baa2 and BBB respectively, have said they might downgrade the company.
Saint-Gobain has nearly 1,000 Ohio employees spread among 21 locations in the state; most are in the Greater Akron area and make a variety of items, from radomes to plastic tubing to crystals used in devices to detect such things as radiation. Northeast Ohio is a major hub for Saint-Gobain and is home to its Performance Plastics headquarters and other operations.
Volumes of products sold are still down 17 percent from 2007.
De Chalendar said this month he aims to complete the $1.7 billion sale of the North American assets of its glass bottle and jar unit Verallia to Ardagh Group SA by early 2014. The CEO this year abandoned 2015 targets set in 2010 for annual sales excluding glass packaging of $74 billion.