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Valspar Shareholders Approve $11B Deal

Friday, July 1, 2016

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Shareholders in Minneapolis-based paint company Valspar voted Wednesday (June 29) to approve the sale of the company to rival Sherwin-Williams.

The vote, which was held during a special shareholders meeting, marks a significant step needed to close the deal—worth an estimated $11.3 billion.

Merger
Sherwin-Williams

(Left) John G. Morikis, president and CEO of Sherwin-Williams and Gary E. Hendrickson, chairman and CEO of Valspar, referred to the deal as a “transformational transaction” and “a perfect fit” in a conference call announcing the deal.

Announced in March, the merger would result in a combined coatings company with annual sales of $15.6 billion, profits of $2.8 billion and 58,000 employees, according to the companies. The deal would increase Sherwin-Williams’ global footprint in Asia-Pacific and Europe, the Middle East and Africa (EMEA) and add new capabilities in packaging and coil segments, according to Sherwin-Williams’ President and CEO John G. Morikis.

The companies anticipate a first quarter 2017 closing.

Under Evaluation

Before closing, federal antitrust regulators must also approve the proposed transaction. The U.S. Federal Trade Commission has requested additional information and documentary materials from both parties.

According to Wednesday’s filing with the U.S. Securities and Exchange Commission, the Valspar vote in favor of the merger was 63.2 million shares, with 1.1 million against. Sherwin-Williams’ shareholders do not need to vote on the transaction.

The companies' boards of directors previously approved the transaction.

Executive Compensation

During the special meeting, Valspar shareholders also agreed to a top-level executive compensation clause should the merger close, the Minneapolis Star Tribune reported.

Valspar’s CEO Gary E. Hendrickson is expected to receive severance of roughly $38.1 million in combined cash, equity and benefits, the report stated. The company’s chief financial officer, James Muehlbauer, would reportedly receive $11.1 million and Rolf Engh, Valspar’s executive vice president and general counsel, would get $5 million in combined compensation.

   

Tagged categories: Acquisitions; Business matters; Coatings Technology; Federal Trade Commission; Mergers; Regulations; Sherwin-Williams; Valspar

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