14 December 2012 10:02 [Source: ICIS news]
LONDON (ICIS)--AkzoNobel has agreed to sell its North American decorative paints operations to US company PPG Industries for a total of $1.05bn (€798m), the Netherlands-based coatings and specialty chemicals group said on Friday.
The sale was prompted by the decision to concentrate its decorative paints activities in Europe and “high growth regions”. AkzoNobel is to continue to operate its performance coatings and specialty chemicals businesses in North America, the company added.
With deal completion expected in the second quarter of 2013, the sale price includes round $875m in cash. The proceeds are to be invested in organic growth and cutting net debt, according to AkzoNobel.
With operations in the US, Canada and Puerto Rico, the Decorative Paints North America unit posted revenues of $1.5bn in 2011, representing around 7% of AkzoNobel’s total revenue that year.
AkzoNobel CEO Ton Buchner said: “Over the past four years, the team has done a great job in turning the North American Decorative Paints business around. We are convinced that Decorative Paints can get better returns from our leading positions in Europe and high growth markets.”
For PPG, the deal represents an opportunity to significantly expand its presence in the North American decorative paints market, and to continue the expansion of its coatings business.
"This acquisition continues the accelerated pace of our business portfolio transformation through further expansion of our coatings businesses . It is also an attractive way to significantly increase our scale in the North American paint market,” said PPG CEO Charles Bunch.
AkzoNobel Decorative Paints North America has around 5,000 employees and operates eight manufacturing sites, with brands including Glidden in the US and Sico in Canada.
($1 = €0.76)
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