The Dutch-Swedish paint maker AkzoNobel (IW 1000/217) announced Friday that it was selling its North American decorative paints division in a billion-dollar deal to Pittsburgh-based PPG (IW 1000/304), and would focus more on Europe and "high-growth markets."
"AkzoNobel announces the divestment of its North American Decorative Paints business to PPG Industries for the value of $1.05 billion (801 million euros)," it said in a statement released in Amsterdam.
Cash proceeds of the sale will amount to around $875 million, the statement said.
"AkzoNobel has made a strategic choice to focus its decorative paints business area on key markets in Europe and its strong position in high-growth regions," it added.
These regions in particular included Asian countries like China, India and Singapore as well as Latin America, company spokesman Jeroen Pul told AFP.
He said the deal was expected to be finalized by the second quarter of 2013.
The deal included AkzoNobel's decorative paints businesses in the United States, Canada and Puerto Rico.
The company's decorative paints businesses in North America over the last four years made a successful turnaround, handing the company revenues of $1.5 billion in 2011, or 7% of its total revenue that year, AkzoNobel said.
Company CEO Tom Buchner praised the turnaround but said AkzoNobel was convinced "that Decorative Paints can get better returns from our leading positions in Europe and high growth markets."
"This agreement is a good outcome for all stakeholders," he said.
AkzoNobel, the world's top paint maker, employed 5,000 workers at eight sites in the North American region and 55,000 people worldwide.
PPG produces a range of coatings including for the aerospace and shipping industries, and operates in 60 countries around the world.
The deal, said PPG Chief Charles E. Bunch, was "an attractive way to significantly increase our scale in the North American paint market."
Copyright Agence France-Presse, 2012