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Publish Date : 21-Jul-2012

PPG Industries and Georgia Gulf Corporation today announced that the boards of directors of both companies have approved definitive agreements under which PPG will separate its commodity chemicals business and then merge it with Georgia Gulf. This business combination is expected to deliver enhanced value for the shareholders of both companies.

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 in a Reverse Morris Trust transaction. The merger will result in PPG shareholders receiving approximately 50.5 percent of the shares of the merged company (“The Newly Merged Company”), with existing Georgia Gulf shareholders owning approximately 49.5 percent of The Newly Merged Company.

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, 2012. 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.

Following completion of the transaction, which is expected to occur in late 2012 or early 2013, the combined company is expected to have annual revenues of approximately $5 billion and be the third-largest chlor-alkali producer and second-largest vinyl chloride monomer producer in North America.

“This transaction creates a global industry leader with substantial opportunities for long-term growth and enhanced shareholder value,” said 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 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.

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