PPG Industries to sell fiberglass business to Nippon Electric Glass
On May 26, 2017, PPG Industries (PPG) announced that it has signed a definitive agreement to sell its North American fiberglass business to Nippon Electric Glass, marking an end to its fiberglass business. PPG expects the proceeds of the sale to be approximately $545.0 million.
The deal, expected to close in the second half of 2017, includes manufacturing facilities in Chester, South Carolina, and Lexington and Shelby, North Carolina. It also includes administrative and research and development operations in Shelby and Harmar, Pennsylvania, near Pittsburgh.
Michael H. McGarry, PPG’s chairman and chief executive officer, said, “This transaction represents the end of PPG’s history as a manufacturer of fiberglass and is the final action in our disciplined, multiyear strategy to divest non-core businesses. Going forward, we will continue to focus on growing our paints, coatings and specialty materials businesses.”
PPG’s stock price movement last week
On May 26, 2017, PPG Industries closed at $107.24 and rose 0.50% for the week. The Materials Select Sector SPDR ETF (XLB), which holds 4.8% in PPG as of May 26, rose 0.90% and outperformed PPG Industries for the week. PPG’s peers Sherwin-Williams (SHW), Axalta (AXTA), and RPM International (RPM) rose 0.80%, 1.4%, and 1.5%, respectively, for the same period.
PPG stock closed 3.5% above its 100-day moving average of $103.60, indicating an upward trend. Analysts predict PPG’s 12-month target price to be $114.80, implying a potential return of 7.0% over the closing price on May 26, 2017. On a year-to-date basis, PPG has risen 13.2%.
PPG’s 14-day RSI (relative strength index) of 51 indicates that the stock is neither overbought nor oversold. An RSI of 70 indicates a stock is overbought, while an RSI of 30 indicates a stock is oversold.