Chemical company Georgia Gulf reached a US-$2.1 billion deal to absorb PPG Industries's commodity chemicals business, nearly doubling its size and making it one the largest players in the sector.

The combined entity will become the third-largest chlor-alkali producer and the second-largest vinyl chloride monomer producer in North America, the companies said.

PPG will spin off its commodity chemicals business and then immediately merge it with Georgia Gulf in a complex deal known as Reverse Morris Trust transaction.

PPG shareholders will get about 50.5% of the shares of the new company and existing Georgia Gulf shareholders will own the rest.

Georgia Gulf will pay PPG US-$900 million in cash and assume about US-$95 million of debt. PPG shareholders will also get about $1 billion in Georgia Gulf shares, based on the stock's Wednesday close of $28.85 on the New York Stock Exchange.

Georgia Gulf will spend US-$87 million to acquire a minority interest in PPG.

Following completion of the deal, likely in late 2012 or early 2013, the combined company is expected to have annual revenue of about US-$5 billion.

PPG's also reported a 6.5% rise in second-quarter profit to $362 million, or $2.34 per share. Revenue was almost flat at $4 billion.