19 Jul 2006
PPG Strategically Acquired Ameron and Expands Protective Coating Market
(July 19th, 2006--Shanghai, China)PPG Industries (NYSE:PPG) has reached agreement to acquire the Performance Coatings and Finishes business of Ameron International Corporation, Pasadena, Calif., (NYSE:AMN). Completion of the acquisition is subject to customary closing conditions, including receipt of required regulatory approvals, which are expected within 30 to 45 days.
Ameron’s 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 Ameron’s 40-percent ownership in Oasis-Ameron, Ltd., located in Saudi Arabia, subject to the majority shareholders’ approval. The acquisition expands PPG’s 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 office of PPG. “They complement our existing coatings businesses and give us a platform from which to accelerate our growth. With Ameron’s capabilities, technology and brand names, we’ll 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.”
PPG's protective and marine coatings business will manufacture and supply protective coatings for a wide variety of uses, including chemical plants, nuclear power plants, oil platforms, ships, barges, rail cars, bridges and stadiums. Mr. Tom Mauck has been named to be the general manager of protective and marine coatings, he will report to Rich Alexander, senior vice president, coatings.
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About PPG：
PPG Industries Inc. was founded in 1883 in Pittsburgh, USA. As a global manufacturing enterprise, it produces and sells coatings, glass, fiber glass, and chemicals and holds a leading position in the above areas. Up to now, PPG has set up more than 108 production facilities that employ approximately 34,800 employees in 21 countries. PPG has been listed on Fortune 500 for 51 years and is world’s leading transportation coatings manufacturer, as well as World’s leading manufacturer of industrial, aerospace and packaging coatings. Each year, PPG invests millions of dollars in developing products, processes, and the newest technology to meet the market requirements. PPG is one of few publicly traded companies to pay its shareholders dividends continually since 1899, and has paid increased shares to shareholders for 35 consecutive years. According to Fortune, PPG ranked No. 1 in the “Global Most Admired”, chemical industries. For 2003 and 2004, PPG Tianjin was chosen as 10 of t he“Best Employer in China” by Hewitt Consulting Firm and Harvard Business Weekly.
PPG is also one of the few global coatings companies that first invested in China in 1980s. In China, PPG produces and sells seven major products, which includes automotive coatings, industrial coatings, automotive refinishing coatings, packaging coatings, aerospace coatings, architecture coatings, and fiber glass. There are 8 plants in Tianjin, Suzhou Kunshan and Zibo, and trading companies, labs and training centers in Beijing, Shanghai, Suzhou, Guangzhou, Shenzhen and Nanjing. Now PPG has more than 2700 employees in China and more than 6700 employees in AP areas.
In China, the main customers of PPG Automotive coatings include GM, GE, Benz, Chery, Nanjing Iveco and Hainan Mazda. As for packaging coatings, PPG provides coatings to Coca Cola, Pepsi, Lu Lu, etc. PPG provides aerospace coatings to Boeing, Air China, Shanghai Air, Southern Air, etc. One thing that is especially meaningful is that Air China uses PPG coatings for all of its 3 color planes used for Beijing 2008 Olympic Games. Also, PPG provides its industrial coatings to Haier, Nokia, Motorola and Dell and its architectural coatings are widely used in many well-known buildings such as Tian Anmen square, Beijing airport, Shanghai Jinmao Building and Shanghai Oriental Pearl Tower.