Sherwin-Williams, Valspar Say Merger Is on Track to Close by End of First Quarter
December 19 2016 - 11:09AM
Dow Jones News
By Joshua Jamerson
Paint makers Sherwin-Williams Co. and Valspar Corp. affirmed
Monday that their tie-up is on track to close on schedule by the
end of the first quarter, seeking to put to rest what the firms
called "unfounded market rumors" about regulatory pushback.
The companies specifically addressed the prospects of the
marriage passing regulatory muster without Sherwin-Williams
divesting itself of a large chunk of its business.
"Given the complementary nature of the businesses and the
benefits this transaction will provide to customers,
Sherwin-Williams and Valspar continue to believe that no or minimal
divestitures should be required to complete the transaction," the
companies said in a statement.
In March, Sherwin-Williams agreed to pay more than $9 billion in
cash for Valspar in a deal valued at a 35% premium to Valspar's
closing price at the time. In a nuanced way to handle antitrust
risk, the deal includes an unusual clause to slash the $113-a-share
purchase price should antitrust regulators demand aggressive
divestitures.
If Sherwin is forced to sell businesses representing more than
$650 million of Valspar's 2015 revenue, the price drops by $8 a
share. Sherwin could walk away entirely if divestitures climb to
$1.5 billion of revenue, a provision that is more common.
In Monday morning trading, Valspar stock fell 1.4% to
$103.07.
The transaction, which has been approved by Valspar
shareholders, is subject to customary closing conditions and
regulatory approvals. The company said Monday that it is still in
discussions with regulators.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
December 19, 2016 10:54 ET (15:54 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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