AkzoNobel today announced the divestment of its North American Decorative Paints business to PPG Industries, Inc. (PPG), for the value of $1.05 billion. In 2011, the North American Decorative Paints business had revenues of $1.5 billion, around 7 percent of AkzoNobel's total 2011 revenue.
AkzoNobel continues to have a strong presence in North America through its Performance Coatings and Specialty Chemicals businesses, with combined 2011 revenues of over $2.7 billion and close to 5,000 employees.
The company made the decision to divest Decorative Paints North America following a successful four year turnaround. AkzoNobel has made the strategic choice to focus its Decorative Paints Business Area on key markets in Europe and its strong positions in high growth regions.
The cash proceeds of approximately $875 million will be deployed to support the company's strategy. This includes investing in organic growth for AkzoNobel, and reducing net debt. More details on AkzoNobel's priorities will be disclosed during the Strategy Update on February 20, 2013.
"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."
"This acquisition continues the accelerated pace of our business portfolio transformation through further expansion of our coatings businesses," said Charles E. Bunch, PPG chairman and CEO. "It is also an attractive way to significantly increase our scale in the North American paint market."
AkzoNobel Decorative Paints in North America has around 5,000 employees and operates 8 manufacturing sites. It has a number of successful brands, including Glidden in the US and Sico in Canada.