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Letter to the Editor
Thursday July 19
PPG Offers $3 Billion for Dutch SigmaKalon Group
PPG Industries has offered $3 billion for SigmaKalon Group, a Dutch paint and coatings producer acquired four years ago by investment firm Bain Capital. The Pittsburgh-based coatings, glass and chemical maker's bid included assumed debt. Bain Capital has given PPG a period of exclusivity as it considers the offer.SigmaKalon supplies architectural, marine and industrial coatings in Europe, Africa and Asia. SigmaKalon had revenue of about $2.76 billion last year. Sherwin-Williams Company had initially also expressed some interest in the Dutch company's purchase.
Bain Capital bought SigmaKalon in 2003, four years after the company was formed by a merger of Britain-based paint maker Kalon Group, a subsidiary of France's Total SA, and Sigma Coatings, owned by Belgian oil company Petrofina.
"The SigmaKalon business has performed well financially and would be a strong complement to our existing coatings businesses," Charles E. Bunch, PPG's chairman and chief executive, said in a statement. "It would give us an excellent footprint in the European architectural coatings segment, where today we have very nominal participation."
This deal would double sales in Europe and expand PPG's global portfolio by more than 40 percent, Bunch said.
The acquisition would be subject to regulatory approval.
PPG Industries Inc. also reported that its second-quarter profit fell 11 percent, hurt by an asbestos-related settlement charge and higher income tax rate. Quarterly earnings were $249 million, down from $280 million in the prior-year period.
Sales rose to $3.17 billion from $2.82 billion, topping analysts' expectations of $3.13 billion. The company reported sales of $11.08 billion last year.
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