Issue Date: March 28, 2016
Big paint makers merge
Sherwin-Williams has agreed to buy paint competitor Valspar in an $11.3 billion deal expected to close in early 2017. On the basis of 2015 results, the combined company would have sales of $15.6 billion and 58,000 employees, making it the number one global paint maker. Putting the two U.S. Midwest firms together allows Sherwin-Williams to leap from second place ahead of current number one PPG Industries, which had paint sales of $14.2 billion last year. Behind the deal is an effort by Sherwin-Williams to expand its global platform in Asia and Europe and to add new capabilities in the packaging and coil coatings segment. Sherwin-Williams expects cost savings of $280 million within the first two years of closing the transaction. The Valspar acquisition “would be a strong comeback” from Sherwin-Williams’s failed effort to buy the Mexican paint operations of Comex in 2014 for $2.3 billion, says UBS analyst John Roberts.
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