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PPG Industries bucks activist investor's breakup calls

Paints and coatings maker PPG Industries Inc. said it will keep its current business portfolio, including its architectural and industrial coatings units, defying calls from an activist investor for a company breakup.

PPG said two independent strategic review showed the current portfolio "provides the best opportunity to maximize long-term shareholder value."

"By maintaining our current portfolio, we avoid negative commercial, operational and procurement impacts and preserve full strategic flexibility for the future," PPG Chairman and CEO Michael McGarry said.

In October 2018, activist investor Nelson Peltz's Trian Fund Management LP said PPG should consider splitting into two companies and replace McGarry with former CEO Chuck Bunch. The PPG board unanimously backed McGarry.

While PPG decided not to separate its key businesses, the company said it was finalizing a new plan to achieve about $125 million in full-year run rate savings by scaling back low-profit businesses and exiting smaller product lines.

The cost-savings program, which will also include the reorganization of cost structures, is expected to cost $185 million to $200 million, excluding certain non-cash items, in the second quarter.