Acquisitions and Dispositions

12 Months Ended

Dec. 31, 2021

Acquisitions and Divestitures

Acquisitions

Announced Acquisitions

On February 7, 2022, PPG announced that it had entered into an agreement to acquire the powder coatings business of Arsonsisi S.p.A., an industrial coatings company based in Milan, Italy. The transaction is expected to close in the first quarter of 2022, subject to customary closing conditions.

Completed Acquisitions

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

Tikkurila

On June 10, 2021, PPG completed its tender offer for all of the outstanding shares of Tikkurila Oyj ("Tikkurila"). Tikkurila is a leading Nordic producer and distributor of decorative paint and coatings, including an industrial paint business that produces paints and coatings for the wood and metal industries, among others. Immediately prior to the June 10, 2021 acquisition date, PPG owned 9.3% of Tikkurila’s issued and outstanding shares. Immediately following the acquisition date, PPG owned 97.1% of Tikkurila’s issued and outstanding shares. PPG continued to acquire the remaining shares not tendered during the tender offer period through a squeeze out process, ultimately achieving 100% ownership of Tikkurila’s outstanding shares during the fourth quarter of 2021.

The Company paid an aggregate purchase price of $1.7 billion, net of cash acquired. The estimated fair value of the major classes of assets acquired and liabilities assumed as reflected in the preliminary purchase price allocation included property, plant and equipment of $199 million, goodwill of $1.1 billion, identifiable intangible assets of $601 million and working capital of $110 million. Working capital represents receivables, inventories and accounts payable and accrued liabilities. The acquired identifiable intangible assets consist of indefinite-lived trademarks of $405 million and other intangible assets with finite lives of $196 million, which consist primarily of customer relationships, trade names, and acquired technology, subject to amortization over a weighted average period of 15 years. Refer to Note 3, “Working Capital Detail” and Note 6, “Goodwill and Other Identifiable Intangible Assets” for additional information.

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. The purchase price was allocated based on information available at the acquisition date and is subject to customary post-closing adjustments. PPG expects to finalize the purchase price allocation with respect to this transaction by the end of the second quarter 2022.

For the year ended December 31, 2021, Tikkurila represented approximately 2% of the Company’s consolidated net sales. The results of this business since the date of acquisition have been reported within two operating segments: the architectural coatings – EMEA business and the industrial coatings business. The architectural coatings – EMEA business is included within the Performance Coatings reportable business segment and the industrial coatings business is included within the Industrial Coatings reportable business segment.

Wörwag

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.

Cetelon

On April 16, 2021, PPG completed the acquisition of 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.

VersaFlex

On February 19, 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.

Ennis-Flint

On December 23, 2020, PPG completed the acquisition of Ennis-Flint, a global manufacturer of a broad portfolio of pavement marking products, including traffic paint, hot-applied and preformed thermoplastics, raised pavement markers and intelligent transportation systems. PPG funded this transaction using cash on hand. The results of this business since the date of acquisition have been reported within the traffic solutions business within the Performance Coatings reportable business segment.

Alpha Coating Technologies, LLC

On March 2, 2020, PPG completed the acquisition of Alpha Coating Technologies, LLC, a manufacturer of powder coatings for light industrial applications and heat sensitive substrates. The results of this business since the date of acquisition have been reported within the industrial coatings business within the Industrial Coatings reportable business segment.

Industria Chimica Reggiana

On January 31, 2020, PPG completed the acquisition of Industria Chimica Reggiana S.p.A, an Italian manufacturer of automotive refinish products. The results of this business since the date of acquisition have been reported within the automotive refinish coatings business within the Performance Coatings reportable business segment.

Texstars, LLC

On October 25, 2019, PPG completed the acquisition of Texstars, LLC, a manufacturer of high-performance transparencies, wingtip lenses and plastic components for aerospace and defense vehicles and a leader in advanced transparent coatings. The results of this business since the date of acquisition have been reported within the aerospace coatings business within the Performance Coatings reportable business segment.

Dexmet Corporation

On August 14, 2019, PPG completed the acquisition of Dexmet Corporation, a specialty materials manufacturer. Dexmet Corporation specializes in customized, highly-engineered, expanded and perforated metal foils and polymers used for structural applications. The results of this business since the date of acquisition have been reported within the aerospace coatings business within the Performance Coatings reportable business segment.

Hemmelrath

On April 16, 2019, PPG completed the acquisition of Hemmelrath, an automotive coatings manufacturer. Hemmelrath is a global manufacturer of coatings for automotive OEMs. 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.

Whitford Worldwide Company

On March 1, 2019, PPG completed the acquisition of Whitford Worldwide Company, a global manufacturer that specializes in low-friction and nonstick coatings for industrial applications and consumer products. The results of this business since the date of acquisition have been reported within the industrial coatings business within the Industrial Coatings reportable business segment.

Divestitures

In December 2020, PPG committed to a plan to sell certain entities in smaller, non-strategic countries. The revenue of these entities represents less than 1% of PPG annual net sales. The planned sale is expected to occur in early 2022. As a result, the assets and liabilities of these entities were reclassified as held for sale, and Impairment charges of $21 million and $52 million were recorded in the consolidated statement of income for the years ended December 31, 2021 and 2020, respectively, representing the recognition in earnings of the cumulative effect of foreign currency exchange losses previously recorded in equity since acquisition and the excess net book value of the net assets over the anticipated sales proceeds less costs to sell these entities. 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 December 31, 2021 and 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 at December 31, 2021 and 2020 were as follows:


($ in millions)	December 31, 2021	December 31, 2020
Cash and cash equivalents	$13	$20
Receivables	—	5
Inventories	—	5
Assets held for sale	$13	$30
Accounts payable and accrued liabilities	$13	$14
Operating lease liabilities	5	6
Deferred income taxes	2	3
Other liabilities	1	1
Liabilities held for sale	$21	$24

Glass Segment

In the fourth quarter 2021, PPG released an environmental reserve previously established at the time of the sale of the flat glass business under the terms of the separation agreement, resulting in recognition of $25 million income from discontinued operations, or $19 million net of tax.