19 July 2012 12:41 [Source: ICIS news]
LONDON (ICIS)--PPG Industries and Georgia Gulf have approved definitive agreements under which PPG will separate its commodity chemicals business and then merge it with Georgia Gulf in a deal valued at $2.1bn (€1.72bn), the US-based chemical firms said on Thursday.
Following completion of the transaction, which is expected in late 2012 or early 2013, the combined company is expected to have annual revenues of around $5bn and be the third-largest chlor-alkali producer and second-largest vinyl chloride monomer producer in ?xml:namespace>
The transaction value of around $2.1bn consists of $900m of cash to be paid to PPG, approximately $95m of assumed debt, about $87m of minority interest, and
Annual cost savings of $115m from the combination are expected to be fully realised in the first two years, the companies added.
The merged company will be led by
“This transaction creates a global industry leader with substantial opportunities for long-term growth and enhanced shareholder value,” said Carrico.
“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,” he added.
PPG chairman and CEO Charles Bunch said: “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."
Bunch added: “This further strengthens PPG’s already strong cash position and will provide us the opportunity to increase cash deployed for earnings-accretive activities such as acquisitions, organic growth initiatives, debt repayment and PPG share repurchases.”
The terms of the transaction call for PPG to form a new company by separating its commodity chemicals business through a spin off or split off, and then immediately merging the business with
The merger will result in PPG shareholders receiving approximately 50.5% of the shares of the merged company, with existing
($1 = €0.82)
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