The Sherwin-Williams Co. said it still expects to acquire the Valspar paints and coatings company for about $11.3 billion by the end of the first quarter of 2017.
CLEVELAND, Ohio - The Sherwin-Williams Co. on Monday reassured shareholders that it still expects to acquire The Valspar Corp. paints and coatings company for about $11.3 billion by the end of the first quarter of 2017.
In response to what the companies called "unfounded market rumors" about the status of regulatory approvals from the Federal Trade Commission still needed for the transaction, they said they are cooperating fully with the FTC staff.
Sherwin-Williams' President and CEO Johm Morikis Those market rumors include a story in Monday's New York Post, headlined "Sherwin-Williams chief holding out for Trump in Valspar deal," which begins: "No Fortune 500 chief executive could more be looking forward to Donald Trump getting sworn in as president than John Morikis."
The story cites speculation from unnamed sources as saying Morikis is not budging from what Sherwin-Williams initially offered to sell off to gain the FTC's approval of its acquisition "-- in essence telling the regulator he believes he will get a better deal from a Trump-directed FTC, sources said."
The Post story quotes those sources as saying that FTC Chairwoman Edith Ramirez wants to see a larger divestiture before approving Sherwin's acquisition of its rival.
Sherwin-Williams did not respond to questions about the story beyond the statement it released early Monday.
The deal, first announced on March 20, would be the largest acquisition in Sherwin-Williams' 150 history, creating a global paint company with combined revenues of about $15.6 billion, adjusted profits of $2.8 billion, and about 58,000 employees worldwide.
The companies said at the time that neither one believed any divestitures would be needed, but that if Valspar was required to divest businesses totaling more than $650 million of its 2015 revenues, the transaction price would drop to $105 per share from the current price of $113 per share.
Not only that, but if divestitures were required beyond $1.5 billion in 2015 revenues, "Sherwin-Williams would have the right to terminate the transaction."
On May 11, the companies released a joint statement that the FTC had asked each side for more information and additional documents, a request they stressed was "fully anticipated" and a common part of the review process. Again, they said the deal was expected to close during the first quarter of 2017.
"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 Monday's statement.
The transaction, approved by Valspar shareholders on June 29, still hinges on customary closing conditions, including the expiration or termination of the applicable waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act and regulatory approvals in various other jurisdictions.
It's not clear when that waiting period expires or the earliest date that Sherwin-Williams could consummate its acquisition.
Sherwin-Williams' shares closed down 1 percent on Monday, to $268.88 per share.