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Saint-Gobain spins off its UK distribution business.

Recently, Saint-Gobain disclosed that the company has signed a binding agreement to sell all of its distribution business in the UK to Starkgroup. The divestitures have a combined value of approximately £740 million. The transaction is expected to close in the first quarter of 2023 and is not subject to any external conditions. Saint-Gobain will then no longer have any distribution operations in the UK.

As part of Saint-Gobain's ongoing strategy "Grow & Impact". This is a complete exit from the UK distribution market following the divestiture of the UK professional distribution brand in 2018.

Stark Group will acquire and operate Saint-Gobain Building Distribution Ltd, which includes Jewson, Gibbs & Dandy, JP Corry, Jewson Civil Frazer and Minster, and International Timber. In total, it has 600 outlets and 8,900 employees.

The acquired business is expected to generate net sales of approximately £2.3 billion in 2022, with an operating margin of approximately 2%.

Stark Group, one of the fastest growing building materials retailers and distributors in Europe, acquired Saint-Gobain's German distribution business in 2019, which includes brands such as Raab Karcher, Melle Gallhöfer, Keramundo, Muffenrohr and more.

Søren P. Olesen, CEO of the group, said: "This acquisition is a perfect fit for our strategy of successfully focusing on the specialist craftsman and renovation and maintenance markets.

In 2021, the Saint-Gobain "Transform & Grow" program will be renamed the "Grow & Impac" program, allowing regional affiliates to make their acquisitions in the sustainable building materials industry. Against this backdrop, Saint-Gobain expanded its acquisitions with three major acquisitions in the US and Canada: Continental Building Products-CBP for $1.4 billion in November 2019, GCP Applied Technologies for €2.3 billion in December 2021, Acquire Kaycan for $928 million in May 2022. In three years, its external growth was nearly 4 billion euros.

In the part of unsustainable business, Saint-Gobain gradually divested the European bathroom glass factory and the UK bathroom distribution business.

Figure 1 The Saint-Gobain spins off its UK distribution business.

Figure 1 The Saint-Gobain spins off its UK distribution business.

In terms of plans, Saint-Gobain believes Western Europe will play a leading role, apart from North America (which should account for 25% of its turnover in 2030, compared with 13% in 2018). Emerging and developing countries accounted for 20% of Saint-Gobain's growth in 2018 and nearly 25% by 2030. In developing countries, Saint-Gobain believes its solutions are only second or third today. For example, China only accounts for 3%~3.5% of its turnover. “We don’t want to earn 20% there for obvious geostrategic reasons,” said Saint-Gobain chief executive Benoît Bazin. There are no major players or acquisition plans here either.

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