Alcoa Building Products Inc.'s attempt to acquire Gentek Building Products Inc. is over, with officials citing unresolved liability issues.
In a Dec. 18 telephone interview, Gentek Building Products Chief Executive Officer Ken Waldron confirmed the two companies could not reach an agreement. He cited a ``recent impasse over key issues and they couldn't be resolved.''
Gentek is owned by Toronto-based Genstar Capital Corp. In that firm's third-quarter report released Nov. 30, Genstar President John McCarthy stated that ``the principal reason for the termination was warranty matters associated with paint peeling from steel siding.''
``An indemnification from the paint supplier could not be negotiated to insulate Alcoa and/or Gentek from future warranty claims,'' McCarthy said.
If it had been successful, the acquisition would have magnified Alcoa's distribution power with a foothold in the Canadian market. As late as Nov. 20, Alcoa Building Products officials had labeled the deal ``not finalized.''
McCarthy said sale negotiations were terminated in October.
``The potential future cost of warranty claims for peeling paint was too much of a burden for the shareholders of Gentek to bear in the way of price concessions,'' he wrote. ``The company's inability to negotiate an acceptable indemnity with the supplier of the paint to relieve that burden caused the sale process to end.''
Neither McCarthy nor officials at Alcoa Building Products could be reached for comment.
Asked if Alcoa would pursue other acquisitions to broaden its vinyl siding reach, Alcoa Inc. spokeswoman Joyce Saltzman said: ``Alcoa is always looking for opportunities for profitable growth.''
Meanwhile, Alcoa Building Products announced Dec. 17 that it will move its headquarters from Sidney, Ohio, to Pittsburgh, effective in January. Pittsburgh is the headquarters for Alcoa Inc.
According to a company news release, the move will not affect 450 employees in Sidney. The new office will include a training center for distributors, contractors and employees.
``The city of Pittsburgh and Alcoa have historically strong cultural and business ties, so this is a natural for us,'' Gary Acinapura, president of Alcoa Building Products, said in the release. ``The decision to move to Pittsburgh was a strategic one, because we will be better situated to tap into the wealth of resources available to us through the Alcoa corporate center.''
In November, Alcoa Building Products closed its vinyl extrusion facility in Princeville, Ill. It still maintains vinyl extrusion facilities in Stuarts Draft, Va., and Denison, Texas. There are no vinyl extrusion operations in Sidney.
Gentek Building Products operates one vinyl extrusion facility in Burlington, Ontario.