PPG Industries announced today 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.
“This acquisition continues the accelerated pace of our business portfolio transformation through further expansion of our coatings businesses,” said Charles E. Bunch, PPG chairman and CEO. “It is also an attractive way to significantly increase our scale in the North American paint market, which we anticipate will benefit from a prolonged construction market recovery.”
AkzoNobel continues to have a strong presence in North America through its Performance Coatings and Specialty Chemicals businesses, with combined 2011 revenues of over $2.7 billion and close to 5,000 employees.
“Over the past four years, the team has done a great job in turning the North American Decorative Paints business around,” said Ton Büchner, CEO of AkzoNobel. “We are convinced that Decorative Paints can get better returns from our leading positions in Europe and high growth markets. I am pleased that we have found a respected company to take over the business. This agreement is a good outcome for all stakeholders.”
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,” Bunch 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 of AkzoNobel’s North American architectural coatings manufacturing distribution facilities, paint stores, product lines and employees related to the production, sale and distribution of architectural coatings in the U.S., Canada and the Caribbean.
Leading brands included are Glidden®, Flood®, Liquid Nails®, Sico® and CIL®. PPG also will license Dulux®, Devoe® architectural coatings and Sikkens® architectural wood products.
Read the complete release from PPG here.