LONDON â€" The specialty chemical company PPG Industries agreed on Friday to buy part of the North American operations of a Dutch rival, AkzoNobel, for $1.05 billion.
Under the terms of the deal, PPG Industries said it would acquire the North American decorative paints unit of AkzoNobel. The division, whose brands include Glidden, reported revenue of around $1.5 billion last year, according to a joint statement from the companies.
PPG Industries, which is based in Pittsburgh, said the acquisition would expand its store network to around 1,000 outlets and help it profit from an expected recovery in the American construction industry.
“It is an attractive way to significantly increase our scale in the North American architectural paint market,†PPG Industries' chief executive, Charles E. Bunch, said in a statement.
The American chemical company also said it would carry out a share buyback of up to $750 million next year after it completes the sale of its commodity chemicals business in a previously announced $2 billion deal with the Georgia Gulf Corporation.
PPG Industries said that the deal with AkzoNobel would add around $160 million in net earnings over a three-year period, including a one-time gain of $60 million upon completing the acquisition, which is expected to close during the second quarter of next year.
AkzoNobel, which will continue to operate performance coatings and specialty chemical businesses in North America, said the proceeds from the sale would total $875 million, which would be reinvested in its other global operations and used to reduce the company's debt burden.
Shares in AkzoNobel rose 5.5 percent in morning trading on Friday in Amsterdam.
This post has been revised to reflect the following correction:
Correction: December 14, 2012
An earlier version of this post erroneously ran an outdated photo. The current chief executive of AkzoNobel i s Ton Büchner, not Hans Wijers, who stepped down in April.
