The activist who has shaken up P & G is back with a major industrial company

TORONTO – Trian Partners co-founder and chief investment officer, Ed Garden, said on Thursday that PPG Industries will have to replace its "cumbersome" management to lift disappointing profits in the global coatings business.

PPG is one of the largest paint companies in the world, with a market capitalization of approximately $ 26 billion. The size and scale of PPG make the company a business barometer for the health and direction of the global economy.

On October 8, PPG issued a profit warning and informed investors that the company is likely to forfeit consensus estimates of 10 percent in the third quarter and 20 percent in the fourth quarter, Garden said. This is the third profit warning for PPG for the third quarter in a row, said Trian CIO.

The company also lost its deal with home improvement retailer Lowe's in February, a significant loss for its coatings business. Garden also said management may struggle to limit material and foreign exchange costs, but the board has some options.

"PPG is a company that is quite immune to the typical disruptive forces," he said. "There is no Amazon risk, there are no changing risks for consumers … it's a deal with a really good moat."

Trian urges the company to consider separating it into an architectural coatings company and an industrial coatings company, thereby creating value through two pure play businesses. The split could also help the architectural business focus on growth and strategic planning, as the market and opportunities, according to the Trian thesis, are missed.

In a statement issued on Thursday, PPG said two of its directors had already met with Trian. "We have been listening to our shareholders for a long time and hope Trian is ready to accept our offer for a continuous, constructive private dialogue," it said. "At the meeting and subsequent discussions, the directors of PPG made it clear that the board of directors unanimously supports Michael McGarry as chairman and CEO, but that PPG and the board can listen to Trian on other issues creating value for all PPG shareholders."

Garden, currently General Electric Director, was previously a board member of Pentair, Wendy's and Family Dollar Stores. Garden and Peltz founded Trian in 2005.