Subsequent Events

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Divestitures

On October 17, 2024, PPG announced that it had entered into a definitive agreement to sell 100% of its architectural coatings business in the U.S. and Canada at a transaction value of approximately $550 million to American Industrial Partners (AIP), an industrials investor. Net cash paid to PPG at closing will include customary adjustments for working capital and net debt. The transaction, which is expected to close in late 2024 or early 2025, subject to customary closing conditions, is the result of PPG’s evaluation of strategic alternatives for the business, which was first announced on February 26, 2024.

In 2023, net sales of the U.S. and Canada architectural coatings business were approximately $2.0 billion. The company expects to record a loss in the fourth quarter 2024 related to the sale of the business of approximately $300 million pre-tax, including the recognition of accumulated foreign currency losses and the impairment of goodwill. The assets and liabilities of the U.S. and Canada architectural coatings business were classified as held and used as of September 30, 2024.

Business Restructuring

On October 16, 2024, the Company approved a comprehensive cost reduction program with anticipated annualized pre-tax savings of approximately $175 million once fully implemented, including savings of $60 million in 2025. The multi-year program is focused on reducing structural costs primarily in Europe and in certain other global businesses, along with other corporate costs following the two recently announced agreements to sell PPG’s silicas products business and the architectural coatings business in the U.S. and Canada. The program includes various facility closures and other targeted fixed cost reductions. The Company expects to record a pretax restructuring charge of approximately $250 million, based on current exchange rates, in PPG’s fourth quarter 2024 financial results. This charge represents employee severance and other cash costs. As a result of this program, the Company also expects to recognize a $120 million non-cash charge due to the recognition of accumulated currency losses related to the exit of certain international operations and to incur approximately $100 million of incremental non-cash accelerated depreciation expense over the life of the program for certain assets due to their reduced expected asset life. In addition, the Company expects to incur other cash costs of approximately $70 million over the duration of this program, consisting of incremental restructuring-related cash costs for certain items that are required to be recognized as period expense as incurred. The restructuring actions will result in the net reduction of approximately 1,800 positions, primarily in Europe and the U.S.