Completion of the acquisition is subject to customary closing conditions, including receipt of required regulatory approvals, which are expected within 30 to 45 days.
Amerons Performance Coatings and Finishes business employs approximately 700 people and had sales of US$210 million in 2005. The purchase price is US$115 million plus working capital adjustment. The company operates manufacturing sites in the United States, Europe, Australia and New Zealand, in addition to warehouses and offices around the world, some of which would remain with Ameron after the sale.The agreement also includes Amerons 40-percent ownership in Oasis-Ameron, Ltd., located in Saudi Arabia, subject to the majority shareholders approval. The acquisition expands PPGs protective coatings business into Europe and Australia, and it will enable the company to participate in the marine coatings market.
In addition, PPG has acquired the remaining 50-percent share of Dongju Industrial Co., Ltd., from its partners led by Dongju chairman Yeong Kil Sohn. PPG has owned 50 percent of Dongju since 1985 and has accounted for this investment under the equity method of accounting. Dongju serves the automotive original equipment manufacture (OEM), refinish, industrial and packaging coatings segments in South Korea. Dongju has manufacturing locations in Chon Ahn and Busan, South Korea. Terms for the Dongju acquisition were not disclosed.
PPG estimates that the company will increase its reported coatings revenues by approximately US$400 million, or 7 percent, on an annual basis as a result of the two acquisitions.
These acquisitions demonstrate our strategy to focus on coatings and expand into new markets and emerging regions, said Chuck Bunch, chairman and chief executive officer of PPG. They complement our existing coatings businesses and give us a platform from which to accelerate our growth. With Amerons capabilities, technology and brand names, well now have a global presence in protective coatings and will be able to penetrate the marine coatings market. By acquiring the remaining interest in Dongju, we will be able to strengthen our presence in the Asian coatings market and substantially improve our supply chain efficiencies in the region.
Pittsburgh-based PPG is the world's leading manufacturer of transportation coatings, a global supplier of industrial and packaging coatings, and a leading producer of architectural coatings, primarily in North America. In addition, PPG manufactures flat and fabricated glass, continuous-strand fiber glass and chemicals. Sales were US$10.2 billion for 2005.