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Sherwin-Williams, Valspar Extend Merger Plans

Wednesday, March 22, 2017

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A timeline shift has prompted The Sherwin-Williams Company (Cleveland) and The Valspar Corporation (Minneapolis) to push back the termination date of their planned merger agreement, the companies jointly announced in news release Tuesday (March 21).

The companies have extended the termination date to June 21; the original date was March 21.

The delay was prompted by a timeline shift by Sherwin-Williams, which no longer expects its necessary divestitures to be completed by the end of April as previously reported.

The extension of the merger agreement to the end of June is intended to provide sufficient time for the divestitures and the completion of the Valspar acquisition, according to the companies.

Scott Lewis via Flickr

Morikis most recently said after the company’s fourth-quarter earnings report in January that the divestitures were still on track, and that they were expected to be complete at the end of April.

“We continue to move forward on the divestiture of a single business that we believe will allow us to gain approval from the FTC, and we are in discussions with a number of prospective buyers," said John G. Morikis, chairman, president and chief executive officer of Sherwin-Williams.

"We remain confident in our ability to complete the divestiture at a fair price, and we look forward to unlocking the value of the combined business when the Valspar acquisition closes.”

The deal between the competitors was first announced in March 2016, and approved by Valspar shareholders in June. The companies had hoped the deal would close at the end of the first quarter of the 2017 calendar year.

Remaining Confident

Morikis most recently said after the company’s fourth-quarter earnings report in January that the divestitures were still on track, and that they were expected to be complete at the end of April.

While that’s no longer the case, Sherwin-Williams says it is still confident the divestitures will fall below the threshold of $650 million of Valspar 2015 revenues, which is what is needed for the deal to be completed at a price of $113 per share, or $11.3 billion.

Sherwin-Williams

John G. Morikis (left), president and CEO of Sherwin-Williams, and Gary E. Hendrickson, chairman and CEO of Valspar.

According to the news release, Sherwin-Williams expects to provide more definitive timing of the divestiture completion and the Valspar acquisition during its first-quarter earnings conference call on April 20.

PPG Still Eying AkzoNobel

Sherwin-Williams and Valspar aren’t the only companies stirring the coatings-industry pot.

PPG Industries Inc. (Pittsburgh) is reportedly preparing another takeover bid for AkzoNobel (Amsterdam) after its previous offer of $22.4 billion was rejected earlier this month.

On March 9, AkzoNobel CEO Ton Büchner said that the company was still reviewing its options and that PPG’s unsolicited offer “substantially undervalued the company.”

PPG countered that it would “carefully evaluate and consider its position and path forward.”

   

Tagged categories: Acquisitions; AkzoNobel; Business management; Business matters; Coatings; Mergers; Paint; PPG; Sherwin-Williams; Valspar

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