Shares of PPG Industries hit a 52-week high today after the paint and glass maker said it will pay $1.05 billion to acquire the North American architectural coatings business of AkzoNobel, the maker of Glidden and other brands.
Chairman and chief executive officer Charles E. Bunch said in a prepared statement that the acquisition will increase PPG's share of the North American coatings market, "which we anticipate will benefit from a prolonged construction market recovery."
The AkzoNobel unit had 2011 sales of $1.5 billion.
The transaction, expected to close early in the second quarter, includes about 600 AkzoNobel paint stores, including about 300 in the United States.
Mr. Bunch said PPG will not acquire AkzoNobel's U.S. pension and retiree health care obligations as well as other costs associated with the business. That and other synergies from the combination will result in a $160 million operating earnings improvement for the business over the next three years, he said.
PPG also said it will resume its share repurchase program as soon as it completes the sale of its commodity chemicals business to Georgia Gulf, expected to occur early next year.
Mr. Bunch estimated the company will spend $500 million to $750 million in 2013 on share buybacks.
The transaction was announced before Wall Street opened. Shortly after 11 a.m., PPG shares were priced at $132.13, up $6.92, or 5 percent. They are up 58 percent this year.
Len Boselovic: email@example.com or 412-263-1941.