PPG (PPG) Will Spend $1.05B on AkzoNobel North American Architectural Coatings Business
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PPG Industries (NYSE: PPG) today announced that it has reached a definitive agreement to acquire the North American architectural coatings business of AkzoNobel, N.V., Amsterdam, in a deal valued at $1.05 billion. The transaction has been approved by the boards of directors of both companies and is expected to close in early second quarter 2013, subject to regulatory approvals.
CEO Charles Bunch said the acquired business had 2011 revenues of about $1.5 billion and “notably expands our customer reach in all three major North American architectural paint distribution channels.” The acquisition includes the addition of about 600 AkzoNobel-owned paint stores creating a combined network of about 1,000 company-owned stores serving the North American market. “It also complements PPG's national home center strategy by extending our branded paint product offerings to more than 8,000 retail outlets,” he added, referencing AkzoNobel- and PPG-branded retail paint products, “and finally, it enhances our already strong presence in the independent paint dealer channel.”
The acquisition includes all AkzoNobel North American architectural coatings manufacturing and distribution facilities, paint stores, product lines and employees related to the production, sale and distribution of architectural coatings in the United States, Canada and the Caribbean.
Leading brands included are GLIDDEN(R), FLOOD(R), LIQUID NAILS(R), SICO(R) and CIL(R). PPG also will license the following brands: DULUX(R), DEVOE(R) architectural coatings, and SIKKENS(R) architectural wood products.
The $60 million improvement anticipated upon closing includes costs that will not be incurred by PPG relating to defined benefit pension expense, amortization expense relating to prior AkzoNobel acquisitions and various administrative costs that will not transfer to PPG. The expected incremental savings of $30 million by the end of the first year and an additional $70 million by the end of the third year following the acquisition include cost synergies stemming from overlap in administration, distribution and manufacturing, the company said.
CEO Charles Bunch said the acquired business had 2011 revenues of about $1.5 billion and “notably expands our customer reach in all three major North American architectural paint distribution channels.” The acquisition includes the addition of about 600 AkzoNobel-owned paint stores creating a combined network of about 1,000 company-owned stores serving the North American market. “It also complements PPG's national home center strategy by extending our branded paint product offerings to more than 8,000 retail outlets,” he added, referencing AkzoNobel- and PPG-branded retail paint products, “and finally, it enhances our already strong presence in the independent paint dealer channel.”
The acquisition includes all AkzoNobel North American architectural coatings manufacturing and distribution facilities, paint stores, product lines and employees related to the production, sale and distribution of architectural coatings in the United States, Canada and the Caribbean.
Leading brands included are GLIDDEN(R), FLOOD(R), LIQUID NAILS(R), SICO(R) and CIL(R). PPG also will license the following brands: DULUX(R), DEVOE(R) architectural coatings, and SIKKENS(R) architectural wood products.
The $60 million improvement anticipated upon closing includes costs that will not be incurred by PPG relating to defined benefit pension expense, amortization expense relating to prior AkzoNobel acquisitions and various administrative costs that will not transfer to PPG. The expected incremental savings of $30 million by the end of the first year and an additional $70 million by the end of the third year following the acquisition include cost synergies stemming from overlap in administration, distribution and manufacturing, the company said.
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