At the close of 2007, it was almost hard to see through the blizzard of acquisitions in the paint and coatings sector, as it seemed nearly every player in the market place was making announcements, finalizations or new bids to build their global businesses.
PPG will see a sharp expansion of its worldwide offerings when it acquires Sigma Kalon Group, a Netherlands-based producer of architectural, decorative and protective coatings, as well as coatings for the marine and industrial markets.
The approximately $3.22 billion deal was approved in mid-December by European Union regulators. The acquisition will secure PPG’s status as the second largest paint manufacturer worldwide.
While PPG has manufacturing facilities and other operations in 25 countries, Sigma Kalon sells coatings in more than 40 countries. Sigma Kalon Group is owned by Bain Capital Partners, a private investment firm which gained interests in a number of home improvement companies in 2007, including HD Supply and American Standard.
Sigma Kalon makes decorative coatings under several international brands, including Avi, Eureka and Prominent Paints. Sigma Kalon products are sold throughout Eastern and Western Europe, Africa and Asia. PPG brands include Pittsburgh Paints, olympic, Monarch, Porter Paints and Manor Hill.
Further demonstrating the depth of consolidation in the paint industry, PPG has been a rumored buyer of Akzo Nobel’s Crown paints brand. Akzo, in turn, acquired Crown as part of its own major acquisition of Imperial Chemical Industries (ICI), parent of Glidden, Dulux and Liquid Nails. To appease European Union regulators, Akzo agreed to sell Crown in order to complete its acquisition of ICI. Akzo completed its acquisition of ICI on Jan. 2—ICI’s shares ceased to be listed on the London Stock Exchange on Jan. 3.
Akzo made its first approach for paint manufacturer and retailer ICI in June and raised its offer three times, eventually settling on a $15.8 billion price tag. The acquisition will create the second largest manufacturer of paint in the United States next to Sherwin-Williams, and the largest manufacturer of paint and coatings in the world.
Other major paint companies are expanding further overseas, while large U. S. companies continue to tout the benefits of the United States market, even in a housing down turn. Valspar president and CEO William Mansfield commented on the s