PPG To Acquire AkzoNobel’s U.S. Paint Business

A leading U.S. paint brand is changing hands between global chemical companies. AkzoNobel has agreed to sell its North American architectural paint business, which includes the Glidden coatings line, to PPG Industries for $1.05 billion.

The business being sold had 2011 sales of about $1.5 billion. Its roughly 5,000 employees work at eight manufacturing plants, 600 AkzoNobel-owned paint stores, and other company locations.

Akzo acquired the business in 2008 as part of its $16 billion acquisition of ICI. In the years since, Akzo has turned the unit around, according to CEO Ton Büchner. But the Dutch firm has now decided to focus its architectural paint business on certain European markets and other high-growth regions, he says.

For PPG, the purchase will more than double the size of its North American architectural coatings business and boost its network of company-owned stores to about 1,000. The Pittsburgh-based firm expects the integration will yield $160 million in savings over a three-year period.

Phil G. Phillips, president of the coatings-oriented Chemark Consulting Group, says Akzo succeeded in converting Walmart to Glidden paints from Sherwin-Williams’ Dutch Boy brand last year but has since suffered under relentless price pressure from the retail giant. “I have to applaud Akzo for recognizing that sometimes the market leader—as they are globally—cannot do everything everywhere,” he says.

PPG is familiar with big retailer merchandising tactics, Phillips adds, and should do well with the former Akzo business as the housing market recovers in the coming years.