Sherwin-Williams To Buy Rival Valspar

(RTTNews) - Paint company Sherwin-Williams Co. (SHW), Sunday said it has agreed to buy rival Valspar Corp. (VAL) for an enterprise value of $11.3 billion.

Sherwin-Williams will pay Valspar shareholders $113 per share in cash for each share held. The price represents a premium of about 41% to Valspar's volume weighted average price for the 30 days up to and including March 18.

The deal accelerates Sherwin-Williams growth strategy by expanding its global platform in Asia-Pacific and EMEA.

The deal has been unanimously approved by the Boards of Directors of both companies.

Sherwin-Williams and Valspar have highly complementary paints and coatings offerings and this combination enhances Sherwin-Williams position as a premier global paints and coatings provider.

The combined company would have pro forma 2015 Revenues and adjusted EBITDA of about $15.6 billion and $2.8 billion, respectively.

The acquisition is subject to antitrust review and is expected to close by the end of the first quarter in 2017. Sherwin-Williams and Valspar believe that no or minimal divestitures should be required to complete the transaction.

Sherwin-Williams CEO John Morikis said, "Valspar is an excellent strategic fit with Sherwin-Williams. The combination expands our brand portfolio and customer relationships in North America, significantly strengthens our Global Finishes business, and extends our capabilities into new geographies and applications, including a scale platform to grow in Asia-Pacific and EMEA."

Morikis said the combined company will achieve estimated annual synergies of $280 million within two years and long-term annual synergy target of $320 million.

SHW closed Friday's trading at $288.69, up $1.60 or 0.56%, while VAL closed trading at $83.83, down $0.86 or 1.02%.