PPG Sweetens Offer To Buy Tikkurila For $1.52B

PPG Industries announced that it has revised its buyout offer for Finnish paint maker Tikkurila. PPG has now agreed to buy Tikkurila for 1.24 billion euros ($1.52 billion), up from its previous offer of 1.1 billion euros. Shares of the global supplier of paints, coatings, and specialty materials closed 2.1% higher on Tuesday and have increased 13.4% over the past year.

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PPG’s (PPG) revised its offer after Tikkurila received a competing proposal. According to improved deal, Tikkurila shareholders are being offered 27.75 euros in cash for each Tikkurila stock they own.

The companies, which scheduled for the tender offer of the shares to begin around January 15, expect the deal to close in the second quarter of 2021.

PPG’s CEO Michael McGarry said, “The combination of PPG and Tikkurila is highly synergistic due to the complementary geographies, product offerings and cultures.” (See PPG stock analysis on TipRanks)

In addition, PPG Industries has announced the acquisition of coatings manufacturer VersaFlex for an undisclosed amount. The company expects the transaction to be completed in the first quarter of 2021.

Meanwhile, on Dec. 1, Deutsche Bank analyst David Begleiter raised the stock’s price target to $165 (14.3% upside potential) from $155 and maintained a Buy rating, after the company announced the acquisition of Ennis-Flint for $1.15 billion.

The analyst sees the Ennis-Flint takeover as “strategically sound ” since the deal would help strengthen its mobility coatings franchise and will further accelerate its growth. PPG completed the Ennis-Flint acquisition on Dec. 24.

The rest of the Street is cautiously optimistic on PPG stock. The analyst consensus of a Moderate Buy is based on 7 Buys and 4 Holds. The average price target of $154.20 suggests upside potential of about 6.8% to current levels.