PPG Commodity Chemicals Business to Merge with
July 20, 2012
PPG Industries and Georgia Gulf Corp. have announced that the boards
of directors of both companies have approved definitive agreements
under which PPG will separate its commodity chemicals business and
merge it with Georgia Gulf.
The terms of the transaction call for PPG to form a new company
by separating its commodity chemicals business through a spinoff
or split off, and then immediately merging the business with Georgia
Gulf or a Georgia Gulf subsidiary.
The transaction value of approximately $2.1 billion consists of
$900 million of cash to be paid to PPG, approximately $95 million
of assumed debt, about $87 million of minority interest, and Georgia
Gulf shares to be received by PPG shareholders valued at $1.0 billion
based on Georgia Gulf's closing stock price on July 18. In the transaction,
PPG will transfer related environmental liabilities, pension assets
and liabilities and other post-employment benefits (OPEB) obligations
to the newly merged company.
"This transaction creates a global industry leader with substantial
opportunities for long-term growth and enhanced shareholder value,"
says Paul Carrico, president and chief executive officer of Georgia
Gulf. "The combined company will be a leading integrated chemicals
and building products company that we believe will benefit from
significant integration and scale, a broad portfolio of downstream
products, as well as the regional advantage of low-cost North American
natural gas. This transaction is a natural strategic fit for Georgia
Gulf that provides tremendous value for all stakeholders, including
shareholders, customers, employees and the communities in which
we operate. We are excited to work together with the talented employees
of PPG's commodity chemicals business to combine our strengths and
execute on the significant opportunities inherent in this transaction."
PPG chairman and CEO Charles E. Bunch adds, "We are pleased
to have reached this agreement as this transaction is another major
step in our strategic transformation into a more focused coatings
and specialty products company. This is a unique opportunity to
create significant value for PPG shareholders and to share in synergies
that would not be available to PPG's commodity chemicals business
on its own."