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Sherwin-Williams Finalizes Acquisition of Valspar

Friday, June 2, 2017

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The long-gestating acquisition of the Minneapolis-based Valspar Corporation by The Sherwin-Williams Company (Cleveland) was finalized Thursday (June 1).

The $11.3 billion deal was first announced in March 2016 and was unanimously approved by the boards of directors of both companies. The acquisition met with U.S. and Canadian regulatory approvals last week.

The Sherwin-Williams Company

The long-gestating merger between The Sherwin-Williams Company and The Valspar Corporation was finalized Thursday in a $11.3 billion deal.

The merger creates a global paints and coatings company with a strong financial foothold across the Asia-Pacific and Europe, the Middle East and Africa (EMEA) regions.

"We are pleased to complete this transaction, and I would like to officially welcome our new colleagues from Valspar and the tremendous talent they bring to Sherwin-Williams,” said John G. Morikis, chairman, president and CEO of Sherwin-Williams. “The acquisition of Valspar accelerates Sherwin-Williams' global growth strategy and creates the global leader in paints and coatings.

“The combination of these two companies creates a world-class brand portfolio, expanded product range, premier technology and innovation platforms, and an extensive global footprint. These enhanced capabilities will benefit our customers and create sustainable long-term value for our shareholders."

Terms of the Merger

The companies will complete the deal for $113 per share; the stock was valued at $112.99 a share when the market closed Wednesday. Valspar common stock ceased trading prior to the market opening on Wednesday, and it will be delisted from the New York Stock Exchange.

Sherwin-Williams stock was up $4.58 to $336.35 in mid-afternoon trading Thursday. The company will announce financial results for the second quarter, which ends June 30, on Thursday, July 20.

During the three-month period ending April 28, Valspar reported just under $1.1 billion in net sales, up from just under $1.06 billion during the same period in 2016.

The Valspar quarterly dividend, which was payable on June 8, will not be paid because the deal was completed prior to the close of business on June 1.

Global Power

The combined company reported 2016 revenues of $15.8 billionwith $2.8 billion in adjusted earnings annuallyand has about 60,000 employees worldwide. Its status as the world’s largest paints and coatings company will remain secure for the time being, after PPG Industries on Thursday dropped its pursuit to acquire Dutch paintmaking firm Akzo Nobel.

As part of a regulatory agreement with the Federal Trade Commission in relation to the merger, Sherwin-Williams will divest of Valspar’s North American industrial wood coatings business by selling the unit to Philadelphia-based Axalta Coating Systems for $420 million in cash. That sale, which Sherwin-Williams announced in April, must be completed within 10 days.

Sherwin-Williams and Valspar had announced in a joint press release March 21 that they would extend the termination date of their merger agreement from March 21 to June 21, which would allow Sherwin-Williams to complete the necessary divestitures to clear the regulatory hurdles.

The Valspar Corporation

Sherwin-Williams' acquisition of Valspar will make it the world's largest paints and coatings company.

Sherwin-Williams sells its paints in more than 4,100 company-operated locations, and distributes other brands through mass merchandisers, home centers, independent paint dealers, hardware stores, automotive retailers and industrial distributors. The company's Global Finishes group, which includes protective and marine coatings as well as glass, automotive and other coatings for industry, represented 15.9 percent of its overall net sales in 2016.

Valspar offers a broad range of coatings for consumers, along with products for the construction, industrial, packaging and transportation markets.

   

Tagged categories: Acquisitions; Asia Pacific; Coating Materials; Coatings manufacturers; Earnings reports; EMEA (Europe, Middle East and Africa); Finance; Latin America; Mergers; North America; Sherwin-Williams; Valspar

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