Allstate, a division of Allstate Corp., said it would not renew its current contract with Safelite Glass Corp., a privately held company, when the pact expires in October 2000.

Instead, Northbrook, Ill.-based Allstate is in talks with Lynx Services, a subsidiary of Pittsburgh-based PPG, to provide those services. No final agreement has been reached, said April Hattori, an Allstate spokeswoman.

``We based our selection process on various factors including costs, customer service and process execution,'' Hattori told Reuters.

The Allstate decision was revealed in a Safelite filing with the Securities and Exchange Commission on Thursday.

Allstate's revenue to Safelite -- which is owned by Thomas H. Lee Co., a private equity firm -- represented about $120 million, or 14 percent of Safelite's total revenues, during the 1999 fiscal year which ended in March, according to the SEC filing.

Safelite said it was planning actions to reduce its overall cost structure ``in light of current industry conditions as well as this development.''

The company will record restructuring charges in the quarter ending Jan. 1 associated with these efforts, the filing said. Safelite did not disclose the size of the charges.

Safelite officials were not immediately available for comment. A spokesman for PPG declined to comment.

Follow Up Article
By Jeremy Pelofsky

WASHINGTON, Oct 28 (Reuters) - Allstate Insurance Co. said on Thursday it is negotiating for a unit of PPG Industries Inc. to provide autoglass repair, replacement and administrative services to the insurance company's clients.

Allstate, a division of Allstate Corp., said it will not renew its current contract with Safelite Glass Corp., a privately held company, when the pact expires in October 2000.

Instead, Northbrook, Ill.-based Allstate is in talks with Lynx Services, a subsidiary of Pittsburgh-based PPG, to provide those services. No final agreement has been reached, said April Hattori, an Allstate spokeswoman.

"We based our selection process on various factors including costs, customer service and process execution,'' Hattori told Reuters.

The Allstate decision was revealed in a Safelite filing with the Securities and Exchange Commission on Thursday.

Allstate's revenue to Safelite -- which is largely held by Thomas H. Lee Co., a private equity firm, and its board members -- represented about $120 million, or 14 percent of Safelite's total revenues, during the 1999 fiscal year which ended in March, according to the SEC filing.

"We'll be looking at other sales growth initiatives to replace this business on the top line and to also examine our cost structure,'' Doug Herron, chief financial officer for Safelite, told Reuters.

Additionally, Safelite said today it was planning actions to reduce its overall cost structure "in light of current industry conditions as well as this development.''

The company will record restructuring charges in the quarter ending Jan. 1 associated with these efforts, the filing said.

"We do have some thoughts, some actions and some plans for things we can do or we need to do in terms of reducing our overall cost structure to help improve the company's profitability in light of industry conditions,'' Herron said.

At this time, however, he said there was no estimate on the size of the charges.

A spokesman for PPG declined to comment.