Acquisitions and Dispositions

Acquisitions

In July 2014, PPG acquired The Homax Group, Inc., a supplier of decorative wall and ceiling texture repair products in North America and Masterwork Paint Company, an independent architectural paint distributor headquartered in Pittsburgh. In addition, in June 2014, PPG acquired Canal Supplies Inc., a privately-owned, Panama-based distributor of protective and marine coatings to customers in Central America, and Painter's Supply, an independent architectural paint distributor headquartered in Connecticut. The collective purchase price for these transactions, and the fair value of the assets and liabilities acquired, were not material.

In June 2014, PPG announced that it reached an agreement to acquire Consorcio Comex, S.A. de C.V. ("Comex"), an architectural and industrial coatings company headquartered in Mexico City, Mexico. Comex manufactures and sells coatings and related products in Mexico and Central America through approximately 3,600 stores that are independently owned and operated by more than 700 concessionaires. Comex also sells its products through regional retailers, wholesalers and direct sales to customers. The company has approximately 3,900 employees, eight manufacturing facilities and six distribution centers, and had sales of approximately $1 billion in 2013. The transaction is valued at $2.3 billion and is subject to regulatory approvals and customary closing conditions.

In June 2014, PPG purchased an additional ownership interest in a consolidated joint venture within our protective and marine coatings business. The purchase price was approximately $35 million.

In March 2014, PPG completed the acquisition of substantially all of the assets of Hi-Temp Coatings Technology Co., Inc., a privately-owned supplier of high-temperature-resistant and insulative coatings, based in Boxborough, Massachusetts. The acquisition enhances the product portfolio of PPG’s protective and marine coatings business, adding coatings that withstand extreme temperatures to protect both carbon steel and stainless steel substrates. The coatings are used widely in refineries, petrochemical plants, pulp and paper mills, and power plants. The purchase price of this acquisition, and the fair value of the assets and liabilities acquired, were not significant.

In April 2013, PPG finalized the acquisition of the North American architectural coatings business of Akzo Nobel N.V., Amsterdam, the Netherlands ("North American architectural coatings acquisition") for $947 million, net of cash acquired of $14 million, and including a working capital adjustment. The acquisition further extended PPG’s architectural coatings business in the United States, Canada and the Caribbean. With this acquisition, PPG has expanded its reach in all three major North American architectural coatings distribution channels, including home centers, independent paint dealers and company-owned paint stores. Since April 1, 2013, the results of this acquired business have been included in the results of the architectural coatings - Americas and Asia Pacific operating segment, within the Performance Coatings reportable segment.

The following table summarizes the fair value of assets acquired and liabilities assumed as reflected in the final purchase price allocation for the North American architectural coatings acquisition.



($ in millions)
Current assets	$	558
Property, plant, and equipment	184
Trademarks with indefinite lives	174
Identifiable intangible assets with finite lives	196
Goodwill	225
Other non-current assets	49
Total assets	$	1,386
Current liabilities	(326		)
Accrued pensions	(29		)
Other post-retirement benefits	(40		)
Other long-term liabilities	(44		)
Total liabilities	$	(439	)
Total purchase price, net of cash acquired	$	947

The following information reflects the net sales of PPG for the nine months ended September 30, 2013 on a pro forma basis as if the North American architectural coatings acquisition had been completed on January 1, 2013.



Condensed Consolidated Pro Forma information (unaudited)
	Nine months ended
($ in millions)	September 30, 2013

Net sales	$11,137

Also during the nine months ended September 30, 2013, the Company completed the acquisition of certain assets of Deft Incorporated, a privately-owned specialty coatings company based in Irvine, Calif. The acquisition enhances the coatings capabilities of PPG’s aerospace business. Deft products include structural primers and military topcoats for the North American aviation industry. In addition, Deft produces some architectural and general industrial coatings.

Dispositions

In September 2014, PPG completed the sale of substantially all of the assets of its former Mt. Zion, Illinois, flat glass manufacturing facility to automotive glass manufacturer Fuyao Glass America Incorporated. As a result of this transaction, the Company recognized a pre-tax gain of $22 million which is reported in the caption "Other income" on the Condensed Consolidated Statement of Income. The sale did not include specific production assets which are unique and specialized to PPG. In order to facilitate the eventual removal of these assets from the Mt. Zion site, an agreement was entered into for the lease of the facility by PPG for a six-month period that ends on February 28, 2015. PPG is obligated to remove the non-acquired assets by the end of the lease period.

In July 2014, Pittsburgh Glass Works LLC ("PGW"), an equity affiliate in which PPG has an approximate 40%

ownership interest, sold its insurance and services business and recognized a pre-tax gain on the sale. PPG accounts for its interest in PGW under the equity method of accounting and in the third quarter of 2014 recognized $94 million as its share of the gain on this transaction. This gain is reported in the caption "Other income" on the Condensed Consolidated Statement of Income. In addition, PPG received a cash distribution of approximately $38 million from PGW to offset PPG’s expected income tax liability associated with this sale. The pre-tax gain and the cash distribution are both reported within the "Equity affiliate earnings, net of distributions received" caption on the Condensed Consolidated Statement of Cash Flows.