Shares of PPG Industries (PPG - Get Report) , the $25.44 billion paints, coatings and materials supplier, were falling Tuesday after the company announced it would continue with its current strategy following a review of its business.
The stock fell fell is premarket trading slightly, before rising 0.72% to $108.52 a share in regular hours.
Aided by advisers from Goldman Sachs and Morgan Stanley, PPG's board of directors said in a press release Tuesday that the company's current portfolio of businesses -- heavily comprised of its architectural and industrial coating units -- gives the company the best opportunity to capture value on a long-term basis. The review includes a $125 million run-rate savings plan.
The other components to the review include optimization of manufacturing processes, trimming of low profitability businesses, discontinuing unprofitable product lines, and the reorganization of cost structures in some of the business units.
"PPG's Board of Directors commissioned a strategic review process by two independent advisers, with a focus on long-term shareholder value, along with the guidance of 'nothing is sacred,'" said Hugh Grant, PPG's lead independent director. "The independent findings made clear, and after its own review of these findings the Board concluded that, the current business portfolio provides the best opportunity to drive long-term shareholder value."
"The two independent advisers performed thorough reviews and their similar conclusions clearly indicate the value of maintaining our current business portfolio, including architectural and industrial coatings, as the best strategic path to maximize shareholder value. By maintaining our current portfolio, we avoid negative commercial, operational and procurement impacts and preserve full strategic flexibility for the future," said Michael H. McGarry, PPG's chairman and CEO.
The stock has risen just 8% in the past five years. It has gained 6% year to date.