NATRIUM-By early 2013,the$2.1 billion merger of the PPG Industries Natrium plant-along with other portions of the Pittsburgh-based company's chemical business-and Atlanta-based Georgia Gulf will be complete.
"Going forward,we believe low-cost natural gas in North America will remain globally advantaged as a source of energy.We expect this to place the Gulf Coast chloro-vinyls producers in a strong position to supply domestic and export customers,"said Georgia Gulf President and Chief Executive Officer Paul Carrico.
"We believe our pending merger with PPG's commodity chemicals business will create a chemicals and building products leader that is well positioned to benefit from this cost advantage and expanding global demand for our products,"he added.
The specific terms of the transaction call for PPG to form a new company by separating its commodity chemicals business through a spinoff,then immediately merging the"new"business with Georgia Gulf.The merger will give PPG shareholders approximately 50.5 percent of the shares of the merged company,with existing Georgia Gulf shareholders owning about 49.5 percent of the newly merged company.
Georgia Gulf shareholders are expected to approve the deal early next year.According to Georgia Gulf,the merged company will assume approximately$95 million of debt,about$87 million of non-controlling interest,and related environmental liabilities,pension assets and liabilities and other post-employment benefits obligations from PPG.
The PPG Natrium plant-located south of Moundsville along W.Va.2-manufactures chemicals,primarily chlorine,caustic soda,muriatic acid and calcium hypochlorite.These chemicals have a wide variety of end-uses including water purification,paper and plastics production and as key building blocks for pharmaceuticals.
The plant is also located right in the center of the burgeoning Marcellus and Utica shale natural gas boom,which Carrico referenced.As part of this,PPG last year signed a drilling lease with Gastar Exploration.PPG would gain about$50 million with Gastar drilling 30 wells on 3,300 acres of PPG land near the Natrium site.Permits issued by the West Virginia Department of Environmental Protection show Gastar is in the process of drilling on this land.
The merged company will have approximately 6,400 employees working at more than 40 facilities,primarily in North America.PPG officials have said it would be"business as usual"for the local plant,at least until the deal is closed.
Following the merger,the combined company is expected to have annual revenues of about$5 billion and be the third-largest chlor-alkali producer and second-largest vinyl chloride monomer producer in North America.The merged company will be led by Carrico and a senior management team comprised of both Georgia Gulf and current PPG commodity chemicals employees.
"We remain on schedule to complete the separation of our commodity chemicals business and the merger of that business with Georgia Gulf,with closing expected to occur by early next year,"said Charles E.Bunch,PPG chairman and chief executive officer.