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PPG Chemicals Unit Becomes Axiall

Thursday, February 7, 2013

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PPG Industries has completed the separation and merger of its commodity chemicals business with a Georgia Gulf subsidiary, giving rise to a new entity called Axiall Corporation.

PPG announced in December that it would proceed with the split-off the $5 billion business after a favorable ruling from the U.S. Internal Revenue Service. At that point, the new company formed from the split-off was going to be called Splitco.

Georgia Gulf

Axiall Corporation manufactures two integrated chemical product lines, chlorovinyls and aromatics, as well as building and home improvement products under the names Royal Building Products and Exterior Portfolio.

PPG's former commodity chemicals business is now a wholly owned subsidiary of Georgia Gulf.

The closing of the merger followed the expiration of the exchange offer at 8 a.m. ET Jan. 28 and the satisfaction of other conditions, according to PPG.

Global Chemicals Deal

Axiall is a manufacturer of two integrated chemical product lines, chlorovinyls and aromatics, according to the company. The company also manufacturers a line of custom and other vinyl-based building and home improvement products under the names Royal Building Products and Exterior Portfolio.

When it announced the plan in July, PPG said the $2.1 billion deal would create "a leading global chemicals and building products company with a broad portfolio of downstream products and approximately $5 billion in revenues."

PPG said the merged company would have about 6,400 employees at more than 40 facilities, primarily in North America.

The board of directors for Axialli Corporation consists of 11 members, and the company will be led by Georgia Gulf president and CEO Paul Carrico.

PPG members on the new board of directors include Robert Ripp, who is also a director of PPG Industries; Michael McGarry, executive vice president of PPG Industries; and Dr. Victoria F. Haynes, a PPG director.

Paul D. Carrico (left) is the president and CEO of Axiall. Michael McGarry is an executive vice president of PPG and serves on Axiall's board. Dr. Victoria F. Haynes, a PPG director, will also serve on the new board.

Financials

In the merger, each share of Eagle Spinco common stock was automatically converted into the right to receive one share of Georgia Gulf common stock.

As part of the exchange offer, PPG accepted 10,825,227 share of PPG common stock in exchange for 35,249,104 shares of Eagle Spinco common stock.

PPG also received $900 million in cash in connection with separating its commodity chemicals business and its merger with Georgia Gulf.

PPG will report the results of its commodity chemicals business for January 2013 and a net gain from the separation when it reports its results for the quarter ending March 31, the company said.

About the Companies

Founded in 1883, PPG has its global headquarters in Pittsburgh, PA, and operates in more than 60 countries worldwide.

Georgia Gulf, headquartered in Atlanta, GA, is a North American manufacturer of two chemical lines, chlorovinyls and aromatics, and manufactures vinyl-based building and home improvement products.

The company's building and home improvement products include window and door profiles, mouldings, siding, pipe and pipe fittings, and deck products and are marketed under the Royal Building Products and Exterior Portfolio brands.