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PPG Industries (PPG) and Tikkurila Revise Agreement Terms

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PPG Industries, Inc. (PPG - Free Report) announced a revision in its earlier announced definitive agreement with Tikkurila to increase the cash offered for each share of Tikkurila stock. Under the agreement, PPG Industries will acquire all issued and outstanding stock of Tikkurila in an all-cash transaction.

Per the revised terms, Tikkurila shareholders will receive €27.75 in cash for each Tikkurila stock that they own, amounting to a total transaction value of around €1.24 billion. This includes the assumption of debt and cash.

The upside in the offer price is a result of Tikkurila’s receipt of a proposal regarding a competing offer. The companies expect the offer for all outstanding shares to start on or around Jan15. The deal is expected to be completed by the second quarter of 2021, subject to customary closing conditions.

The Tikkurila buyout will expand PPG Industries’ portfolio and provide customers with a wider range of paint and coatings options. The company expects to incorporate Tikkurila’s high-quality, environment-friendly products with its renowned industrial coatings. The company will also benefit from Tikkurila’s presence in several northern and eastern European countries, where it has minimal footing.

Shares of PPG Industries have gained 16.3% in the past year compared with 17.7% rise of the industry.

PPG Industries is committed to grow business through strategic acquisitions.The company recently acquired Ennis-Flint, a global manufacturer of coatings. The acquisition helps PPG Industries expand its product portfolio and broaden opportunities in rapidly developing and high-growth mobility technology solutions.

PPG Industries is also actively managing costs amid the coronavirus pandemic. The company expects to generate restructuring savings of $30-$35 million for the last quarter of 2020.

 

Zacks Rank & Key Picks

PPG Industries currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space include Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Fortescue has a projected earnings growth rate of 53.6% for the current fiscal. The company’s shares have surged 172.4% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of 43.3% for the current fiscal. The company’s shares have gained around 23% in the past year. It currently flaunts a Zacks Rank #1.

Impala has an expected earnings growth rate of 131.7% for the current fiscal. The company’s shares have surged around 35.7% in the past year. It currently sports a Zacks Rank #1.

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