Jefferies Adjusts PPG (PPG) Estimates to Reflect Split-Off

PPG Industries (NYSE: PPG) yesterday announced that it has commenced its exchange offer related to the split-off transaction of its commodity chemicals business. The split-off transaction is in connection with the separation and merger of Eagle Spinco Inc., a wholly-owned subsidiary of PPG that will own substantially all of the assets and liabilities of PPG's commodity chemicals business, with a subsidiary of Georgia Gulf Corporation (NYSE: GGC). As previously announced, PPG entered into definitive agreements as of July 18, 2012, to separate and merge its commodity chemicals business with Georgia Gulf.

Commenting on developments, analysts at Jefferies said "We are adjusting our estimates to reflect a successful transaction: we are raising 2013E $0.30 to $6.75 and 2014E $0.45 to $7.95, up 18% YoY and slightly above consensus of $7.68. Our estimates do not reflect the potential accretion from the recently announced acquisition, nor the planned $500-$750m buyback in 2013E."

Looking forward, analysts expect further M&A focused on industrial coatings as well as in US architectural.

Jefferies has a Buy rating on PPG Industries (NYSE: PPG) with an updated price target of $151.00 (from $150.00).

For an analyst ratings summary and ratings history on PPG Industries click here. For more ratings news on PPG Industries click here.

Shares of PPG Industries closed at $133.12 yesterday.

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