US: Sherwin-Williams deal for Valspar raises antitrust concerns

Sherwin-Williams $9.3 billion deal to buy rival paintmaker Valspar Corp. drew skepticism from investors over its chances for antitrust approval without significant divestitures.

Valspar shares topped out at $105 in trading Monday, reflecting a provision in the agreement that allows Sherwin-Williams to trim the per-share offer to that amount from $113 if regulators require the divestiture of assets that generate more than $650 million in revenue.

The assumption is “they wouldn’t have put those contingencies into the deal structure if there wasn’t a meaningful chance they might trigger them,” said John Roberts, an analyst at UBS Securities.

John Morikis, chief executive officer of Sherwin-Williams, is forging the company’s biggest deal ever less than three months after succeeding longtime CEO Christopher Connor. Sherwin-Williams, which gets 84 percent of sales in the U.S., gains a company that generates almost half of its revenue abroad while also adding coatings for coils and packaging. Valspar will help Sherwin-Williams expand in the Asia Pacific region and Europe, Morikis said in an interview.

“This accelerates the strategy we have long had in place,” Morikis said by telephone Sunday. “Valspar is a company we have long admired.”

Full content: Pittsburgh Post-Gazette

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