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PITTSBURGH–(BUSINESS WIRE)–PPG (NYSE:PPG) today announced that it has entered into a definitive agreement to acquire Tikkurila (NASDAQ OMX: TIK1V) in an all-cash transaction. Under the terms of the agreement, PPG will commence a tender offer to acquire all of the issued and outstanding stock of Tikkurila. Pursuant to the offer, Tikkurila shareholders will receive €25.00 in cash for each share of Tikkurila stock they own, for a total transaction value of approximately €1.1 billion, including the assumption of debt and cash. The transaction is expected to close in the second quarter of 2021, subject to customary closing conditions.

“The combination of PPG and Tikkurila is extremely complementary, both geographically and from a decorative brand perspective,” said Michael McGarry, PPG chairman and chief executive officer. “We have long admired Tikkurila’s rich history of establishing very strong decorative brands and product offerings in several northern and eastern European countries where PPG has minimal decorative presence.

“We will be able to provide customers with even more paint and coatings options by bringing together Tikkurila’s high-quality and environmentally friendly decorative products and distribution capabilities in these countries with PPG’s well-respected industrial and protective coatings. In addition, the combination will provide new cross-selling opportunities, growth opportunities for employees, and product solutions for new segments and customers. We look forward to welcoming the Tikkurila team to PPG and working with them to drive future growth,” concluded McGarry.

Tikkurila was established in 1862, and is headquartered in Vantaa, Finland. The company is a leading producer and distributor of decorative paint and coatings with operations in 11 countries and more than 80% of its revenue coming from Finland, Sweden, Russia, Poland, and the Baltic states. Its premium brands include Tikkurila, ALCRO, and Beckers. In addition, Tikkurila’s industrial paint business participates in the wood and protective coatings end-use segments, among others. The company employs approximately 2,700 people globally and reported sales of approximately €564 million in 2019.

“During the past three years, we have made a clear turnaround and significant progress with our strategy. Joining forces with PPG can help us further accelerate our development with access to new technologies and resources. We look forward to working together with PPG for an even more colourful tomorrow,” said Elisa Markula, CEO of Tikkurila.

PJT Partners LP served as PPG’s financial advisor for the transaction, and Wachtell, Lipton, Rosen & Katz and DLA Piper Finland Attorneys Ltd served as PPG’s legal advisors.

Invitation to live webcast on December 18, 2020 at 7:30 a.m. ET

PPG and Tikkurila will hold a live webcast and conference call today on December 18, 2020 at 7:30 a.m. (ET).

To join the webcast, click on the following link: https://tikkurila.videosync.fi/tikkurila-webinar-18-12-2020

Dial-in numbers:

Finland: +358 9 8171 0310

Sweden: +46 8566 42651

UK: +44 33330 00804

US: +1 631 9131422

PIN: 78285809#

Please register or dial in about 5-10 minutes prior to the start of the event. By registering for the event or dialing in to the conference call, participants agree that personal information such as name and company name will be collected. The conference call will be recorded.

Additional details about the tender offer are contained in the attached Nasdaq Helsinki stock exchange release.

PPG: WE PROTECT AND BEAUTIFY THE WORLD™

At PPG (NYSE:PPG), we work every day to develop and deliver the paints, coatings and materials that our customers have trusted for more than 135 years. Through dedication and creativity, we solve our customers’ biggest challenges, collaborating closely to find the right path forward. With headquarters in Pittsburgh, we operate and innovate in more than 70 countries and reported net sales of $15.1 billion in 2019. We serve customers in construction, consumer products, industrial and transportation markets and aftermarkets. To learn more, visit www.ppg.com.

Tikkurila: is a leading Nordic paint company with expertise that spans decades. Tikkurila develops premium products and services that provide its customers with quality that will stand the test of time and weather. Tikkurila operates in eleven countries and its 2,700 dedicated professionals share the joy of building a vivid future through surfaces that make a difference. In 2019, revenue totaled €564 million. The company is listed on Nasdaq Helsinki.

Forward-Looking Statements

The forward-looking statements contained herein include statements relating to the timing of and expected benefits of the Tikkurila acquisition. Actual events may differ materially from current expectations and are subject to a number of risks and uncertainties, including the satisfaction of the conditions of the acquisition and other risks related to completion of the acquisition and actions related thereto; the parties’ ability to complete the acquisition on the anticipated terms and schedule, including the ability to obtain regulatory approvals; the ability of PPG to achieve the expected benefits of the acquisition; and the other risks and uncertainties discussed in PPG’s periodic reports on Form 10-K and Form 10-Q and its current reports on Form 8-K filed with the Securities and Exchange Commission.

We protect and beautify the world is a trademark and the PPG Logo is a registered trademark of PPG Industries Ohio, Inc.

# # #

PPG Industries, Inc. announces a voluntary recommended public cash tender offer for all the shares in Tikkurila Oyj

TIKKURILA OYJ

INSIDE INFORMATION

December 18, 2020 at 9:00 EET

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND OR SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW.

PPG Industries, Inc. (“PPG” or the “Offeror”), a public company incorporated under the laws of Pennsylvania, and Tikkurila Oyj (“Tikkurila” or the “Company”) have on December 18, 2020 entered into a combination agreement (the “Combination Agreement”) pursuant to which the Offeror will make a voluntary recommended public cash tender offer for all issued and outstanding shares in the Company (the “Shares”) that are not held by the Company or any of its subsidiaries (the “Tender Offer”). In the Tender Offer, the Company’s shareholders will be offered a cash consideration of EUR 25.00 for each Share validly tendered in the Tender Offer (the “Offer Price”), subject to possible adjustments as described under section “Offer Price”. The Tender Offer values the Company’s total equity at approximately EUR 1.1 billion. The members of the board of directors of the Company (the “Board of Directors”), who participated in the decision-making have unanimously decided to recommend that the shareholders of the Company accept the Tender Offer.

Key highlights and summary of the Tender Offer

  • The Offer Price represents a premium of approximately 66.2 per cent compared to the closing price of the Shares on Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) on December 17, 2020, the last trading day prior to the announcement of the Tender Offer; approximately 70.3 per cent compared to the volume-weighted average trading price of the Shares on Nasdaq Helsinki during the three-month period prior to and up to the date of the announcement of the Tender Offer; and approximately 77.8 per cent compared to the volume-weighted average trading price of the Shares on Nasdaq Helsinki during the 12-month period prior to and up to the date of the announcement of the Tender Offer.
  • The Offeror sees significant value and potential in Tikkurila and accordingly expects to make substantial investments in Tikkurila’s technology, infrastructure and people, as well as provide Tikkurila access to PPG’s global diversified paints, coatings and speciality coatings offerings on which Tikkurila will be able to build and further deepen its customer relationships, develop lateral products and access additional geographies.
  • The completion of the Tender Offer is not expected to have any immediate material effects on the operations or the position of the management or employees of the Company.
  • Certain major shareholders of Tikkurila, i.e. Oras Invest Oy, Varma Mutual Pension Insurance Company, Mandatum Life Insurance Company Limited and Kaleva Mutual Insurance Company, representing in aggregate approximately 29.34 per cent of the shares and votes in the Company, have, subject to certain customary conditions, irrevocably undertaken to accept the Tender Offer.
  • The Offeror has secured the required financing to finance the Tender Offer at completion in accordance with its terms, and compulsory redemption proceedings, if any, in accordance with the Finnish Companies Act (624/2006, as amended, the “Finnish Companies Act”).
  • The Offeror expects to publish a tender offer document (the “Tender Offer Document”) with detailed information on the Tender Offer on or about January 15, 2021. The offer period under the Tender Offer is expected to commence on or about January 18, 2021, and to expire on or about March 12, 2021, unless the Offeror extends the offer period in order to satisfy the conditions to completion of the Tender Offer, including, among others, receipt of the relevant regulatory approvals. The Tender Offer is currently expected to be completed during the first half of 2021.
  • The completion of the Tender Offer is subject to the satisfaction or waiver by the Offeror of certain customary conditions on or prior to the Offeror’s announcement of the final results of the Tender Offer including, among others, that approvals by the competition authorities and other regulatory authorities have been received and the Offeror having gained control of more than 90 per cent of the Shares and votes in the Company on a fully diluted basis.

Michael McGarry, Chairman and Chief Executive Officer of PPG:

“The combination of PPG and Tikkurila is extremely complementary, both geographically and from a decorative brand perspective. We have long admired Tikkurila’s rich history of establishing very strong decorative brands and product offerings in several northern and eastern European countries where PPG has minimal decorative presence.

We will be able to provide customers with even more paint and coatings options by bringing together Tikkurila’s high-quality and environmentally friendly decorative products and distribution capabilities in these countries with PPG’s well-respected industrial and protective coatings. In addition, the combination will provide new cross-selling opportunities, growth opportunities for employees, and product solutions for new segments and customers. We look forward to welcoming the Tikkurila team to PPG and working with them to drive future growth.”

Heikki Westerlund, member of the Board of Directors of Tikkurila and Chairman of the Committee representing the independent Members of the Board of Tikkurila:

“During the last couple of years Tikkurila has made extremely good progress in improving its profitability and efficiency. The Board of Directors have supported the company’s vision and strategy to continue to grow profitably. However, the speed of consolidation in the paint industry is accelerating. The Board of Directors did not initiate this process, but since we were contacted, we have analysed the offer based on the framework provided by the Helsinki Takeover Code. We have carefully considered the offeror’s ability to become a good and strong owner of Tikkurila. Tikkurila may benefit from PPG’s long-term expertise in R&D, raw material sourcing and strong presence in industrial products. We have further taken into account the position and future possibilities of personnel as part of a larger entity, as well as the offeror’s strategy in terms of following principles of sustainability. Consistent with this view and considering the fair price offered to the shareholders, the Board of Directors sees that the offer presents both a fair and reasonable alternative for Tikkurila and its shareholders.”

Elisa Markula, CEO of Tikkurila:

“Tikkurila has made a successful turnaround and improved its performance significantly during the last three years thanks to its clear strategic action plan and personnel committed to targets. Further, we have increased sales of our quality brands, improved our operational and commercial excellence and focused on efficiency of all operations. Tikkurila is a leader for decorative paints in Russia, Sweden, Finland and the Baltics. I see great potential in Tikkurila, and I consider the tender offer as an evidence of the good progress we have made.”

Annika Paasikivi, CEO of Oras Invest Oy:

“Over the years we have supported Tikkurila’s journey as a leading paints and coatings company in the Nordic countries and Eastern Europe. As PPG approached the Board of Directors of Tikkurila with a concrete proposal, we wanted to ensure the best solution for both Tikkurila and its shareholders. We have confidence in PPG’s plans to develop Tikkurila to become an even stronger company, and have after careful consideration, undertaken to accept the tender offer as per our 20.01 per cent shareholding. Now that one successful phase comes to an end and another is about to begin, we would like to express our deep gratitude to Tikkurila’s personnel, management and the Board of Directors for consistent and long-term work to develop the company. We would also like to thank other significant owners and investors for the good cooperation.”

Background and strategic rationale of the Tender Offer

The Offeror sees significant value and potential in the Company and accordingly expects to make substantial investments in the Company’s technology, infrastructure and people, as well as provide the Company access to the Offeror’s global diversified paints, coatings and speciality materials offering on which the Company will be able to build and further deepen its customer relationships, develop lateral products and access additional markets.

Upon the completion of the Tender Offer, the Offeror expects to position the Company and its various brands as the Offeror’s platform to the Nordic and Baltic regions, Russia and potentially beyond.

The Offeror intends to maintain the Company’s identity, culture and Finnish values, including its commitment to creating sustainable value for all stakeholders and its various investments in local communities and people. The Offeror expects to maintain the Company’s corporate offices in Finland and various production, distribution and sales centres in the Nordic region. Further, the Offeror intends to continue to invest in the Company’s employees and potentially provide larger roles for many of the Company’s key executives.

The Offeror sees the Company’s strong distribution capability as a platform to significantly grow many of the Offeror’s legacy products in its Protective and Marine, Refinish, and Light Industrial Coatings businesses and expand the Company’s and the Offeror’s combined presence in the region.

The Tender Offer would not have any immediate material effects on the Company’s operations, assets, the position of the Company’s employees or its business locations.

About PPG

PPG: WE PROTECT AND BEAUTIFY THE WORLD™

PPG develops and delivers paints, coatings and speciality materials that customers have trusted in for more than 135 years. Through dedication and industry-leading expertise, PPG solves customers’ biggest challenges, collaborating closely to find the right path forward. PPG has a long heritage of, and commitment to, innovation, sustainable product development and community engagement. PPG has approximately 47,000 employees in 70 countries. PPG serves customers in construction, consumer products, industrial and transportation markets and aftermarkets. PPG’s shares are subject to trading on the New York Stock Exchange. To learn more, visit www.ppg.com.

About Tikkurila

Tikkurila offers a broad range of decorative paints for consumers and professionals for surface protection and decoration. The product offering includes, among others, interior paints, lacquers, and effect products, exterior products for wood, masonry, and metal surfaces, as well as services related to painting. In addition, Tikkurila produces paints and coatings for the metal and wood industries.

Tikkurila’s business highlights strong brands generated through high-quality and long-term product development and considerable marketing investments. Tikkurila’s brands include, among others, Tikkurila, Beckers, Alcro, Teks, and Vivacolor. In addition to the strong brands, important factors in Tikkurila’s operations include a functioning and extensive distribution network, diverse services and an efficient supply chain. Consumers and professionals are the end users of Tikkurila’s products and services.

Tikkurila has seven production facilities in six countries and around 2,700 employees. Tikkurila’s products are available in more than 40 countries. Tikkurila’s Shares have been listed on the official list of Nasdaq Helsinki since 2010.

The Tender Offer in brief

The Offeror and the Company have on December 18, 2020, entered into a Combination Agreement pursuant to which the Offeror will make the Tender Offer. A brief summary of the Combination Agreement has been provided below under the section “The Combination Agreement”.

The Offeror and the Company have undertaken to comply with the Helsinki Takeover Code issued by the Finnish Securities Market Association (the “Helsinki Takeover Code”).

As at the date of this announcement, Tikkurila has 44,108,252 issued shares, of which 44,105,881 are outstanding Shares and 2,371 of which are held in treasury. As at the date of this announcement, the Offeror does not hold any Shares in the Company.

The Offeror reserves the right to acquire Shares during the offer period (including any extension thereof and any subsequent offer period) in public trading on Nasdaq Helsinki or otherwise outside of the Tender Offer.

The Offer Price

The Offer Price is EUR 25.00 in cash for each Share validly tendered in the Tender Offer, subject to any adjustments as set out below.

The Offer Price represents a premium of:

  • approximately 66.2 per cent compared to the closing price of the Shares on Nasdaq Helsinki on December 17, 2020, the last trading day prior to the announcement of the Tender Offer;
  • approximately 70.3 per cent compared to the volume-weighted average trading price of the Shares on Nasdaq Helsinki during the three-month period prior to and up to the date of the announcement of the Tender Offer; and
  • approximately 77.8 per cent compared to the volume-weighted average trading price of the Shares on Nasdaq Helsinki during the 12-month period prior to and up to the date of the announcement of the Tender Offer.

The Offer Price has been determined based on 44,105,881 Shares. Should the Company change the number of Shares as a result of a new issue, reclassification, stock split (including a reverse split) or any other similar transaction with a dilutive effect, or should the Company distribute a dividend or otherwise distribute funds or any other assets to its shareholders, or if a record date with respect to any of the foregoing shall occur prior to the consummation of the Tender Offer, the Offer Price shall be adjusted accordingly on a euro-for-euro basis.

The offer period

The offer period under the Tender Offer is expected to commence on or about January 18, 2021, and to expire on or about March 12, 2021. The Offeror reserves the right to extend the offer period from time to time in accordance with, and subject to, the terms and conditions of the Tender Offer and applicable laws and regulations, in order to satisfy the conditions to completion of the Tender Offer, including, among others, the receipt of approvals from relevant competition authorities or other regulatory authorities as set out in the Combination Agreement (or, where applicable, expiry of relevant waiting periods) (the “Regulatory Approvals”). The Tender Offer is currently expected to be completed during the first half of 2021. For further information, see “Regulatory Approvals”.

The detailed terms and conditions of the Tender Offer as well as instructions on how to accept the Tender Offer will be included in the Tender Offer Document, which the Offeror expects to publish on or about January 15, 2021.

Recommendation by the Board of Directors of Tikkurila

The members of the Board of Directors of Tikkurila, who participated in the decision-making, have unanimously, subject to the terms and conditions of the Combination Agreement and its fiduciary duties under Finnish laws and regulations (including the Helsinki Takeover Code), decided to recommend that the shareholders of the Company accept the Tender Offer. The Board of Directors will issue its statement on the Tender Offer in accordance with the Finnish Securities Markets Act (746/2012, as amended, the “Finnish Securities Markets Act”) before the commencement of the offer period. To support its assessment of the Tender Offer, the Board of Directors of the Company has received a fairness opinion from the Company’s financial adviser Skandinaviska Enskilda Banken AB (publ), Helsinki branch (“SEB”), according to which the Offer Price is fair from a financial point of view from the perspective of the shareholders of the Company. The complete fairness opinion will be attached to the statement of the Board of Directors.

The statement of the Board of Directors in accordance with the Finnish Securities Markets Act regarding the Tender Offer will be published prior to the commencement of the offer period and appended to the Tender Offer Document.

Support by certain major shareholders of Tikkurila

Certain major shareholders of Tikkurila, i.e. Oras Invest Oy, Varma Mutual Pension Insurance Company, Mandatum Life Insurance Company Limited and Kaleva Mutual Insurance Company, together representing approximately 29.34 per cent of all the shares and votes in the Company, have irrevocably undertaken to accept the Tender Offer subject to certain customary conditions.

Conditions to completion of the Tender Offer

A condition to the completion of the Tender Offer is that the requirements set forth below for the completion of the Tender Offer (the “Conditions to Completion”) are fulfilled on or by the date of the Offeror’s announcement of the final result of the Tender Offer in accordance with Chapter 11, Section 18 of the Finnish Securities Markets Act, or, to the extent permitted by applicable law, their fulfilment is waived by the Offeror:

  • the Tender Offer has been validly accepted with respect to Shares representing, together with any Shares otherwise held by the Offeror prior to the announcement of the final result of the Tender Offer, on a fully diluted basis, more than ninety (90) per cent of the Shares and voting rights in the Company calculated in accordance with Chapter 18, Section 1 of the Finnish Companies Act governing the right and obligation to commence redemption proceedings (such condition, the “Minimum Condition”);
  • the receipt of all necessary regulatory approvals, permits and consents required under any applicable competition laws or other regulatory laws in any jurisdiction for the completion of the Tender Offer by the Offeror;
  • no legislation or other regulation having been issued or decision by a competent court or

Contacts

Media Contact:
Mark Silvey

Corporate Communications

+1-412-434-3046

[email protected]

Investor Contact:
John Bruno

Investor Relations

+1-412-434-3466

[email protected]
investor.ppg.com

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