PPG Chemicals Unit to Merge with Georgia Gulf
The boards of directors of PPG Industries and Georgia Gulf Corp. have approved definitive agreements under which PPG will separate its commodity chemicals business and then merge it with Georgia Gulf. Following completion of the transaction, expected in late 2012 or early 2013, the combined company will be the second-largest vinyl chloride monomer producer and third-largest chlor-alkali producer in North America with estimated annual revenues of approximately $5 billion
"This transaction creates a global industry leader with substantial opportunities for long-term growth and enhanced shareholder value," says Paul Carrico, Georgia Gulf president and CEO. "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."
"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," says Charles E. Bunch, PPG chairman and CEO. "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."
The terms of the transaction, valued at about $2.1 billion, 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 merger will result in PPG shareholders receiving approximately 50.5 percent of the shares of the newly-merged company, with existing Georgia Gulf shareholders owning approximately 49.5 percent.
In addition to its chemicals and vinyl business, Georgia Gulf is also parent company of Royal Building Products, the extruder of vinyl and window profiles, as well as siding, decking, and trim products.