Sherwin-Williams to Buy Valspar for $8.9 Billion -- 3rd Update
20 März 2016 - 7:06PM
Dow Jones News
By Dana Mattioli, Dana Cimilluca and Liz Hoffman
Sherwin-Williams Co. has agreed to buy Valspar Corp., a painting
and coatings company, for about $8.9 billion.
The Wall Street Journal reported earlier Sunday that the
companies were close to a deal.
The offer is worth $113 a share, a 35% premium to Friday's
close.
The acquisition would give Sherwin more bulk in its battles with
paint rivals PPG Industries Inc. and Amsterdam-based AkzoNobel NV.
Sherwin has focused mainly on the U.S. and Latin America, while PPG
has pursued more of a global strategy with larger operations in
Europe and Asia.
Sherwin has long relied heavily on its own stores for paint
sales, but last year Sherwin began selling a new HGTV brand of
paint at Lowe's stores, taking some space from rivals like
Valspar.
The purchase also would give Sherwin another strong brand to
sell through big-box retailers like Home Depot Inc., Lowe's Cos.
and Wal-Mart Stores Inc., which have been taking market share away
from independent paint stores.
The global coatings market--including paint and coatings used
for cars, ships and myriad other products--produces about $130
billion of sales a year, according to PPG.
Valspar's market value is $6.6 billion. Sherwin-Williams, based
in Cleveland, Ohio, has a much larger market value of $26.8
billion. In 2015, the company had $11.3 billion in sales and a $1.1
billion profit.
The companies said that they expect minimal pushback from
antitrust authorities, but that should regulators require
Sherwin-Williams to sell businesses that contributed more than $650
million to Valspar's 2015 revenue, the deal price would be reduced
by $8 a share. And Sherwin-Williams can walk away with regulators
require divestitures of more than $1.5 billion in revenue.
It has been a busy stretch for deals in the chemicals space,
which coatings companies would fall under. Last year, chemicals
giants Dow Chemical Co. and DuPont Co. signed a deal worth a
combined $120 billion.
Write to Dana Mattioli at dana.mattioli@wsj.com, Dana Cimilluca
at dana.cimilluca@wsj.com and Liz Hoffman at
liz.hoffman@wsj.com
(END) Dow Jones Newswires
March 20, 2016 13:51 ET (17:51 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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