Acquisitions

6 Months Ended

Jun. 30, 2021

Acquisitions and Divestitures

Acquisitions

The pro-forma impact on PPG's sales and results of operations, including the pro-forma effect of events that are directly attributable to the following acquisitions, was not significant.

Tikkurila

On June 10, 2021, PPG completed its tender offer for all of the outstanding shares of Tikkurila Ojy ("Tikkurila"). Tikkurila is a leading Nordic producer and distributor of decorative paint and coatings. Tikkurila’s industrial paint business produces paints and coatings for the wood and metal industries, among others.

As of June 30, 2021, PPG had purchased approximately 97.3% of Tikkurila's issued and outstanding shares. As of March 31, 2021, PPG owned 9.32% of the outstanding shares. All remaining outstanding shares will be acquired through a squeeze out process. As of June 30, 2021, the minority interest is classified as Noncontrolling interests on the condensed consolidated balance sheet. The company paid an aggregate purchase price of $1.7 billion, net of cash acquired. The preliminary determination of fair value of acquired assets and liabilities included goodwill and identifiable intangible assets of $1.0 billion and $672 million, respectively. The fair values assigned to assets acquired and liabilities assumed are based on management's best estimates and assumptions as of the reporting date and are considered preliminary pending finalization of the valuation of deferred tax assets, tax liabilities, and payroll tax liabilities. The acquired identifiable intangible assets consist of indefinite-lived trademarks of approximately $455 million and other intangible assets with finite lives of approximately $215 million, which consist primarily of customer relationships, trade names, and acquired technology, subject to amortization over a weighted average period of 15 years. See Note 5 “Goodwill and Other Identifiable Intangible Assets” for additional information.

The results of this business since the date of acquisition have been reported within two operating segments: the architectural coatings – EMEA business within the Performance Coatings reportable business segment and within the industrial coatings business within the Industrial Coatings reportable business segment.

Other Acquisitions

On May 14, 2021, PPG completed the acquisition of Wörwag, a global manufacturer of coatings for industrial and automotive applications. The company specializes in developing sustainable liquid, powder and film coatings. The results of this business since the date of acquisition have been reported within the automotive original equipment manufacturer ("OEM") coatings business within the Industrial Coatings reportable business segment.

On April 19, 2021, PPG announced that it had acquired Cetelon Lackfabrik GmbH, a manufacturer of coatings for automotive and light truck wheel applications. The results of this business since the date of acquisition have been reported within the automotive OEM coatings business within the Industrial Coatings reportable business segment.

On February 22, 2021, PPG completed the acquisition of VersaFlex, a manufacturer specializing in polyurea, epoxy and polyurethane coatings for water and waste water infrastructure, flooring, transportation infrastructure, and industrial applications. The results of this business since the date of acquisition have been reported within the protective and marine coatings business within the Performance Coatings reportable business segment.

Divestitures

In December 2020, PPG committed to a plan to sell certain entities in smaller, non-strategic countries. The planned sale is expected to occur in 2021. The assets and liabilities of these entities are reported as held for sale in Other current assets and Accounts payable and accrued liabilities, respectively, on the accompanying consolidated balance sheet as of June 30, 2021 and December 31, 2020. The results of these entities are reported within the Performance Coatings reportable business segment.

The major classes of assets and liabilities of these entities included in the PPG consolidated balance sheet are as as follows:


($ in millions)	June 30, 2021	December 31, 2020
Cash and cash equivalents	$22	$20
Receivables	8	5
Inventories	5	5
Assets held for sale	$35	$30
Accounts payable and accrued liabilities	$15	$14
Operating lease liabilities	7	6
Deferred income taxes	3	3
Other liabilities	1	1
Liabilities held for sale	$26	$24