PPG Sells Fiberglass Operations to NEG
US coatings giant PPG has agreed to sell the last of its fiberglass operations to Japanese glass manufacturer Nippon Electric Glass (NEG) for an undisclosed sum.
PPG’s remaining fiberglass assets includes manufacturing facilities in Chester, South Carolina, and Lexington and Shelby in North Carolina; administrative and R&D operations in Shelby and in Harmar, Pennsylvania, near Pittsburgh. The business, which supplies the transportation, energy, infrastructure and consumer markets, employs more than 1,000 people and had net sales of approximately $350 million in 2016.
Pre-tax proceeds from the sale are around $545 million, although are subject to closing adjustments. The transaction is expected to complete in the second half of 2017.
PPG sold its European fiberglass operations to NEG last year and divested its ownership interests in two Asian fiberglass joint ventures. The US group also sold its North American flat glass business to Mexican glass manufacturer Vitro in 2016.
In separate news, PPG’s takeover attempt of Dutch rival AkzoNobel is likely to see further developments this week. According to UK business newspaper Financial Times, a Dutch court is set to rule on a case brought by activist investor Elliott Advisors against AkzoNobel’s management, which has so far rejected three unsolicited bids by PPG.
AkzoNobel’s refusal to sell has sparked dissent among a number of its shareholders, led by hedge fund Elliott, which holds more than 3% of the Amsterdam-headquartered company. Elliott is seeking to overturn AkzoNobel’s rejection of its request for a special shareholder meeting to remove chairman Antony Burgmans, who it sees as an obstacle to the talks.
PPG’s board is scheduled to meet on May 30 and could decide whether to walk away or launch a hostile takeover bid, FT said. Under Dutch takeover rules, PPG must submit formal bidding papers along with evidence of financing to the financial markets regulator AFM by Jun. 1, or it must take a six-month “cooling off” period. PPG is reported to have requested an extension to Jun. 14 at the earliest.
Last month, AkzoNobel announced a “standalone” plan that would see the spin-off of its specialty chemicals division, leaving it to focus on paints and coatings. To bolster shareholder support, the Dutch group has said it would return €1.6 billion in dividend payments.