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Axalta to Buy Valspar’s Wood Coatings Business

Sherwin-Williams and Valspar (NYSE: VAL), whose proposed merger has raised concerns from the Federal Trade Commission, announced that Valspar has agreed to sell its North American industrial wood coatings business to Axalta Coatings Systems (NYSE: AXTA) for about $420 million in cash. 

Officials said the divestiture of the business, which had revenues of $225 million in 2016, should satisfy regulators, and they believe the merger can be completed by the June 21 deadline established by both companies.

The industrial wood coatings business is a major supplier of coatings for furniture, cabinets, flooring and other building products.

"We believe that Axalta is an excellent buyer for our North American Industrial Wood Coatings business and will provide great opportunities for our talented employees,” said Gary Hendrickson, chairman and CEO of Valspar. “Axalta is a strong cultural fit with Valspar and shares our commitment to innovation and customer service.  We will work closely with Axalta to ensure a smooth transition of this business." 

Sherwin-Williams’ $11.3 billion acquisition of Valspar was announced in March 2016, but completion of the deal has been held up by concerns raised by the FTC and its counterpart in Canada, the Canadian Competition Bureau.

"With this agreement, we believe that we have addressed regulatory concerns appropriately and we are moving forward to obtain approval for our acquisition of Valspar,” said John Morikis, president and CEO of Sherwin-Williams. 

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