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PPG raises offer for Tikkurilia in response to competing bid

January 13/2021

MOSCOW (MRC) -- PPG Industries says it has raised its offer for Tikkurila to EUR1.24 billion (USD1.52 billion), or EUR27.75/share, in response to Tikkurilas receipt of an undisclosed rival bid, according to Chemweek.

PPG announced the acquisition of Tikkiurila for an original price of EUR1.1 billion, or EUR25/share, on 18 December. The revised offer represents an 84.5% premium on Tikkurilas closing price as of 17 December, the last trading day before the deal was announced.

Tikkurila is a major producer of decorative paints and coatings, with operations in 11 countries, principally in Northern Europe. The company reported EUR564 million in revenue in 2019.

We will be able to extend the reach of the strong Tikkurila products, and immediately utilize Tikkurilas well-established distribution network across the Nordic region for a wide variety of PPG products, says PPG chairman and CEO Michael McGarry. From a cost standpoint, the Tikkurila management team has implemented a broad margin improvement program over the last couple of years, and we will continue that momentum with supply chain and other traditional acquisition-related synergies.

The tender offer for all outstanding shares in Tikkurila will commence on or around 15 January, and the deal is expected to close in the second quarter of this year.

PPG has announced multiple significant acquisitions in recent weeks. Earlier today, PPG announced the acquisition of VersaFlex, a maker of specialty coatings for industrial and infrastructure end markets, and in November the company said it would acquire transportation coatings maker Ennis-Flint.

As MRC reported previously, in February 2020, PPG said it had completed its acquisition of Industria Chimica Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive refinish products. Financial terms of the deal, including purchase price, were not disclosed. The deal was announced on 8 January. ICR was founded in 1961 and employs about 180 people. ICR manufactures automotive refinish products, including putties, primers, basecoats and clear coats. It also makes a range of coatings, enamels and primers for light commercial vehicles and other light industrial coatings applications. ICR employs about 180 people and sells its products in more than 70 countries in Europe, Africa, the Middle East, the US and Latin America.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of polymers in primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of polymers in primary form totalled 9,240,000 tonnes over the stated period, up by 17.1%  year on year.
Author:Margaret Volkova
Tags:Europe, propylene, ethylene, coatings, car components, paints and coatings, PPG, Tikkurila, Russia, USA.
Category:General News
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