Deal of the Year

An inside look at the Vitro purchase of PPG’s flat glass business

On July 21, officials from PPG Industries announced the company would be selling its flat glass business to Vitro S.A.B. de C.V. The deal, expected to close in October, marks the end of an era in the U.S. glass industry. Glass Magazine spoke with executives from both companies about the deal, what it means for customers and employees, and what it means for the North American glass industry.

Read the full article and interview in the September issue of Glass Magazine. 

Adrian Sada Cueva, chief executive officer of Vitro

What led up to this deal? Had Vitro been looking to expand its flat glass business?    

Vitro’s strategy is to strengthen the company in certain segments, particularly our flat glass business, to make it the most important business unit—the core of our business. PPG has been more focused on its coatings business. We each have compatible strategies, and the timing was right. PPG is a perfect match for us to strengthen the [glass production] business unit. The timing was also good as Vitro’s balance sheet is strong and we are looking for organic growth [opportunities]. 

What made PPG’s flat glass business an attractive acquisition candidate for Vitro?

What are some of the main benefits of adding PPG’s flat glass operations into Vitro’s portfolio?Integrating PPG´s flat glass operation with ours was attractive since it offers to Vitro the opportunity to participate in the U.S. construction market in which we currently don’t participate in a significant way. Another interesting aspect is the great R&D strength which will support our current activities in the automotive segment as well as our Mexican operations. 

From the strategic perspective, bringing these two talented teams to work together is amazing. Both groups have been operating for more than 100 years, so great things will come from working together. 

Richard Beuke, vice president of the PPG flat glass business unit

What made this deal attractive from a PPG flat glass perspective? 

When we started looking at Vitro to see what they were about, we saw a company with a culture that is very similar to the PPG culture. They are very focused on customers. Additionally, they love glass. Vitro has always been in the glass business. Glass has been an important part of PPG, but for the last 10 years, it has not been a strategic part [of the company]. It was only 5 percent of the corporate portfolio. The corporation has focused on the coatings side of the business. … It is one of those bittersweet things. This was really the last part of the glass business in PPG. What started as Pittsburgh Plate Glass won’t have much glass in it. … We were happy to be part of PPG, but we knew it wasn’t in the long-term future. 

Having a glass company buy us is a positive. There was no overlap [geographically] before. We didn’t have any assets in Mexico. The merger between the two of us—these two glass business—expands the geographic regions for both. It’s been a natural fit. 

What will PPG’s flat glass business bring to Vitro, in addition to geographic reach?  

Vitro didn’t do a lot of research, while PPG, through thick and thin, has always backed research. It is one of the strongest areas for us. Vitro liked that, and it was one thing that really interested them, especially on the [low-emissivity] coating side. 

PPG’s brands will also be part of Vitro. They will be transitioned to Vitro over time, but [the industry] will forever have the set brands like Solarban and Starphire. 

What can PPG employees expect? 

I have been in a lot of acquisitions. This is the only time that I’ve seen a purchasing company more concerned that the people stay and support the business.