PPG Commodity Chemicals, Georgia Gulf to Create Chemicals and Building Products Company

PPG Industries, a provider of coatings and specialty products, has inked definitive agreements for the division of its commodity chemicals business and subsequent merger of the business with Georgia Gulf, an integrated North American manufacturer of chlorovinyls and aromatics and producer of vinyl-based building and home improvement products, in a tax efficient deal worth $2.1 billion.

The combination of businesses will create an integrated chemicals and building products company with a wide range of downstream products. The merged entity is expected to generate approximately $5 billion in annual revenues.

The transaction is anticipated to be completed in late 2012 or early 2013. The newly merged company will be the second largest manufacturer of vinyl chloride monomer and third largest manufacturer of chlor-alkali and in the North American region.

Charles E. Bunch, Chairman and Chief Executive Officer of PPG Industries, stated that the deal is another significant progress in the company’s strategy to become a more-focused coatings and specialty chemicals provider. It also reinforces the company’s strong cash position and offers an opportunity to augment the cash allocated for earnings-accretive initiatives, such as PPG share repurchases, debt repayment, organic growth initiatives and acquisitions.

Paul Carrico, President and Chief Executive Officer of Georgia Gulf, commented that this deal is an ideal fit for the company as it delivers a remarkable value for all stakeholders. The merged company will benefit from meaningful integration and scale, a wide range of downstream products, and economical North American natural gas.

Carrico will lead the merged entity with a senior management team comprising employees of both PPG Commodity Chemicals and Georgia Gulf.

Source: http://www.ppg.com

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