Dec. 14, 2012—AkzoNobel has sold its North American Decorative Paints business to PPG Industries Inc. for $1.05 billion, the company announced Friday.
The deal includes AkzoNobel’s Decorative Paints businesses in the U.S., Canada and Puerto Rico. The transaction is expected to be completed during the second quarter of 2013.
AkzoNobel said it decided to divest Decorative Paints North America in order to focus on its Decorative Paints segments in Europe and other high growth regions throughout the world.
"Over the past four years, the team has done a great job in turning the North American Decorative Paints business around," said Ton Büchner, CEO of AkzoNobel. "We are convinced that Decorative Paints can get better returns from our leading positions in Europe and high growth markets. I am pleased that we have found a respected company to take over the business. This agreement is a good outcome for all stakeholders."
AkzoNobel’s Decorative Paints North America—which has 5,000 employees and eight manufacturing sites—has been outperformed in revenue compared to its Performance Coatings and Specialty Chemicals businesses in North America. In 2011, Decorative Paints North America generated $1.5 billion of revenue, roughly 7 percent of AkzoNobel’s total sales, compared to $2.5 billion of revenue generated by its Performance Coatings and Specialty Chemicals segments.
AkzoNobel said $875 million of cash proceeds from the sale will be used for organic growth and reducing its net debt.
"This acquisition continues the accelerated pace of our business portfolio transformation through further expansion of our coatings businesses," said Charles Bunch, chairman and CEO of PPG. "It is also an attractive way to significantly increase our scale in the North American paint market."
