Vitro CEO on PPG Deal: “We’re Very Excited”August 1st, 2016 by Editor
On July 21, a blockbuster deal was announced in the glass business: PPG, which helped launch the industry in the U.S. 133 years ago, sold the assets of its flat glass division to Mexico-based manufacturer Vitro for $750 million in gross cash proceeds.
In the days that followed, DWM examined the impact of the mega-deal on PPG’s business in a series of stories. (Part 1, Part 2, Part 3). Today, Adrian Sada Cueva, the CEO of Vitro, answered questions from DWM on what the expansion means for his company.
Q: What attributes of PPG were you most interested in?
A: From the strategic perspective, there are several things to take note of. One is just the idea or the concept of bringing these two talented teams to work together. It’s just amazing. Both groups have been operating for more than 100 years, so you cannot imagine all the great things that can come out of permitting these two teams to work together, so we’re very excited on that end. Another interesting aspect is the size that this new business unit will have. It will become the most important business unit of Vitro after closing, and of course the sheer strength of this company means it will have a longer-term perspective and invest more and face our competitors in several geographies. Another important aspect for us is that we will be able to participate in the U.S., which is a very important market. It’s very dynamic with a high demand for value-added products.
Q: Have you been a part of other acquisitions in the past? How does this compare?
A: Vitro has acquired companies in the past, but it’s been a very long time; about 27 years since the most relevant acquisition. This (PPG deal) very different in many ways. One is that Vitro today is a much more focused company. Back then, Vitro was a conglomerate with a broader span of business units. We were in the home appliance business back then, along with plastics, textiles, chemicals and so on. Today, Vitro is a different company. We’re much more focused. It’s part of the work we’ve been doing the past few years creating a stronger and much more focused company. So in that regard, I do believe this transaction is much, much different. I would also add that PPG is a leading technology company in the glass industry, and that’s very different from other acquisitions we’ve made in the past. This is a very, very strong company with a strong, historical track record of success.
Q: Is there anything you’d like PPG employees to know about the consolidation of the two companies?
A: We’ve already made a few statements through other channels of communications. We’re inviting all the employees in the glass unit to participate with us and take part in this great new chapter for both companies in which we’ll create a much more powerful and larger company.
Q: A year from now, when you look back on this, what will determine how successful of an acquisition this was?
A: I think that’s part of the different perspective we have. We have a long-term perspective, and I think it will be difficult to evaluate in a year a decision of this magnitude. This is something we bring to the table. As you know, PPG has been more focused on its coatings business, and we’ve been focusing much more on the flat glass business unit, and that’s what we bring, a longer-term perspective for sure.
Q: When we spoke with Richard Beuke from PPG, he talked a lot about how PPG has a significant research component. Could you talk a little bit about that and some of the things you’re interested in exploring or researching?
A: We’re not planning to move the research center. We’re planning to reinforce that center. We want them to have a broader reach now. They’re going to have to support a much larger operation. It’s going to be a bit more demanding, for sure. They’re also going to support our automobile glass business unit.
Q: Any final thoughts?
A: “We’re very excited. PPG is a great company. We’re excited to bring these two teams together, to collaborate to create this great company that’s more diversified. Again, we’re very excited to participate in the U.S. We’re hoping we can bring a longer-term perspective to the business which will permit us to invest more in research and development and add more value to our customers.”