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Separation and Merger Transaction
9 Months Ended
Sep. 30, 2012
Business Combinations [Abstract]  
Separation and Merger Transaction
Separation and Merger Transaction
On July 19, 2012, the Company announced that it had entered into definitive agreements under which PPG will separate its commodity chemicals business and merge it with Georgia Gulf Corporation (“Georgia Gulf”) or one of its subsidiaries. The terms of the transaction call for PPG to form a new company by separating its commodity chemicals business through a spin off or split off, and then immediately merging the business with Georgia Gulf or a Georgia Gulf subsidiary. These steps are collectively referred to as a Reverse Morris Trust transaction. Subject to receiving the necessary rulings from the Internal Revenue Service and the Canada Revenue Agency, PPG expects that this transaction will be generally tax free to PPG and its shareholders. Upon completion of the transaction, which has been approved by the boards of both companies, PPG shareholders will own approximately 50.5 percent of the shares of the newly merged company, with existing Georgia Gulf shareholders owning approximately 49.5 percent of the shares. The transaction value of approximately $2.4 billion consists of $900 million of cash to be paid to PPG, approximately $180 million of assumed debt and minority interests and shares of the newly merged company to be received by PPG shareholders that are valued at approximately $1.3 billion based on Georgia Gulf’s closing stock price on September 28, 2012. In the transaction, PPG will also transfer certain related environmental liabilities, pension assets and liabilities and other post-employment benefits (OPEB) obligations to the newly merged company. The transaction is subject to approval by Georgia Gulf shareholders and customary closing conditions, relevant tax authority rulings and regulatory approvals. To date, Georgia Gulf and PPG have each filed the requisite notification and report forms with the Federal Trade Commission and the Antitrust Division of the Department of Justice on August 15, 2012. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on September 14, 2012 and PPG has received clearance under the Canadian Competition Act. PPG has filed a private letter ruling requests with the Internal Revenue Service and the Canada Revenue Agency and is awaiting rulings on its requests. PPG and Georgia Gulf also have filed the required registration statements with the Securities and Exchange Commission and are currently in the process of responding to SEC comments on these filings. PPG remains on schedule to complete the separation of the commodity chemicals business and the merger of that business with Georgia Gulf, with closing expected to occur by early next year. During the three and nine months ended September 30, 2012, the Company incurred $9 million and $13 million of pretax expense, primarily for fees for professional services related to the separation and merger transaction.
In the quarter the transaction closes, the historical results of the commodity chemicals business will be reclassified and reported as discontinued operations in PPG’s financial statements.