PPG Industries Inc (PPG - Analyst Report) has wrapped up the sale of its commodity chemicals business to Georgia Gulf Corporation, a leading maker of chlorovinyls and aromatics. The transaction cosummated through the merger of its fully owned subsidiary, Eagle Spinco Inc., with a unit of Georgia Gulf.
Eagle Spinco Inc., which operated PPG Industries’ commodity chemicals unit prior to the merger, is now a wholly-owned subsidiary of Georgia Gulf. The closing of the deal followed the expiration of the related exchange offer and the satisfaction of other specific conditions.
Following the merger, the integrated entity was named “Axiall Corporation” and began trading on the NYSE under the ticker symbol “AXLL” effective Jan 29.
PPG Industries, in July 2012, announced a definitive agreement with Georgia Gulf, under which, it agreed split its commodity chemicals unit and merge it with Georgia Gulf for roughly $2.1 billion (including debt).
In the merger, each Eagle Spinco share was converted into the right to receive one Georgia Gulf share. As such, shareholders of PPG Industries, who tendered their shares as part of the exchange offer, received 3.2562 Georgia Gulf shares for each PPG Industries share exchanged and accepted by the company.
PPG Industries accepted 10,825,227 shares of its common stock in exchange for 35,249,104 Eagle Spinco shares. In connection with the merger, the company also received around $900 million in cash.
PPG Industries said that it will report the results of the divested business for Jan 2013 and record a net gain resulting from the sale of the unit when it will release its results for first-quarter 2013. The company, in its fourth-quarter 2012 call, noted that it expects to incur additional charges associated with the deal in the first quarter.
PPG Industries currently holds a short-term Zacks Rank #2 (Buy).