Sherwin-Williams Gets US Antitrust Approval To Acquire Valspar

On Friday afternoon, Sherwin-Williams Co announced it has received its final regulatory green light in its acquisition effort of Valspar Corp. This latest move, then, clears the final hurdles for the Cleveland-based company to become one of the biggest paint companies in the world.

Receiving approval from both the United States Federal Trade Commission and the Canadian Competition Bureau—the final obstacles in this process—has let Sherwin-Williams acquire Valspar for $113 per share, in cash. That is the equivalent of roughly $11.3 billion.

Valspar is a Minneapolis-based global paints and coatings company with consumer paints that are commonly sold in home-improvement stores. The company coatings for construction, transportation, and industrial outlets and also sells consumer paints under the Valspar, Cabot Stain, and Devine Color brands (among others). Sherwin-Williams, on the other hand, makes products under names that include: Sherwin-Williams, Krylon, Dutch Boy, Duron, and Thompson’s Water Seal.

The sale, then, is the biggest such acquisition in the entire 151-year history of Sherwin Williams; an acquisition which will then create a massive global paint company that contributes an estimated $15.6 billion in revenue with an adjusted earnings of $2.8 billion. The new company will employ roughly 58,000 people.

The regulatory approval comes after Sherwin-Williams agreed to settle Federal Trade Commission charges that the proposed deal is anticompetitive. To prevent this, Sherwin-Williams will sell off Valspar’s North American Industrial Wood Coatings Business. In this deal, then, Sherwin-Williams will divest two Valspar industrial wood coatings plant—one based in High Point, North Carolina an the other in Cornwall, Ontario, Canada—to Axalta. At the same time, Axalta will also receive Valspar Industrial Wood Coatings Business’ research and development facilities, warehouses, and testing facilities.

The first inklings of this deal started to surface in March of 2016 but with these new discussions, the deal is now expected to close on June 1, which is the earliest possible date that the deal can close after the approval on Friday. News of this deal saw Valspar shares soar up to $113.07 per share—its highest point in 52 weeks—before settling and closing at $112.99 per share. In addition, Sherwin-Williams shares rose from $334.09 (at close on Thursday) to $334.95 at close on Friday.

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