PPG sells architectural coatings business in the United States and Canada

PPG, a global leader in paints, coatings and specialty materials, announced on the 18th that it has reached a definitive agreement to sell 100% of its architectural coatings business in the United States and Canada to industrial investor AIP (American Industrial Partners) for a transaction value of US$550 million.

The transaction is expected to be completed in late 2024 or early 2025, subject to customary closing conditions. The transaction is the result of PPG's evaluation of strategic alternatives for the business, which was first announced on February 26, 2024. The net cash paid to PPG at the closing will include customary adjustments for working capital and net debt. Goldman Sachs served as exclusive financial advisor to PPG and Hogan Lovells US served as its legal advisor.

The company also announced a comprehensive cost reduction plan that is expected to save approximately $175 million in pre-tax expenses annually after full implementation, including $60 million in 2025.

The company will record approximately $250 million in pre-tax charges in the fourth quarter of 2024 and other charges as certain costs are incurred in future years. Overall, PPG expects the cost reduction program to impact approximately 1,800 positions, primarily in Europe and the United States.

“We are pleased to have reached an agreement with AIP and believe the business is well positioned to capitalize on its current positive momentum, leading brands, proven innovation, established customers and dedicated and talented employees,” said Tim Knavish, PPG chairman and CEO. “I would like to thank the architectural coatings employees in the U.S. and Canada for their dedication and commitment over the years to provide quality products and services that meet the evolving needs of our customers.”

From PPG’s perspective, this transaction and the pending sale of the Silicone Products business demonstrate the company and board’s proactive stewardship of the portfolio. These divestitures further optimize the portfolio by improving the company’s organic growth and financial return profile, helping to direct growth resources to areas of strength.”