CLEVELAND, April 14, 2017 /PRNewswire/ -- In March 2016, Sherwin-Williams announced its agreement to acquire Valspar, a deal valued at approximately $11.3 billion. The merger was initially expected to close by the end of the first quarter of 2017, but amid speculation that either Sherwin-Williams or Valspar might need to divest some of their business in order to gain approval from the US Federal Trade Commission and the Canadian Competition Bureau, the agreement was extended into the second quarter of 2017.
On Wednesday, it was announced that Valspar will sell its North American Industrial Wood Coatings business, with 2016 revenues of approximately $225 million, to Axalta Coating Systems. The deal puts Axalta into a prominent position in the market for wood coatings, with wood stains and sealers under such brands as Graintone, Luster Lac, Valguard, and Zenith. The divestiture is expected to satisfy the concerns of regulators and to allow the merger of Sherwin-Williams and Valspar to proceed.
While the overall paint and coatings industry edges toward consolidation into a handful of dominant market leaders, the merger will now have less impact on the market for wood coatings. According to Freedonia Group industry analyst Matt Breuer, "the original deal would have put Sherwin-Williams' market share at nearly four times that of the next leading company." Under the new deal, Axalta, whose existing wood coatings business is small, will largely take the place of Valspar among market leaders.
For more information on the outlook of the paint and coatings industry, see the Chemicals studies page featuring the following industry studies by The Freedonia Group:
Wood Coatings Market in the US (March 2017)
Architectural Paint Market in the US (February 2017)
Paint & Coatings: US Market Forecasts (February 2017)
Manufacturing (OEM) Coatings Market in the US (January 2017)
Protective & Specialty Coatings Market in the US (January 2017)
About The Freedonia Group – The Freedonia Group, a division of MarketResearch.com, is a leading international industrial research company publishing more than 100 studies annually. Since 1985 we have provided research to customers ranging in size from global conglomerates to one-person consulting firms. More than 90% of the industrial companies in the Fortune 500 use Freedonia Group research to help with their strategic planning. Each study includes product and market analyses and forecasts, in-depth discussions of important industry trends, and market share information. Chemical studies can be purchased at www.freedoniagroup.com and are also available on www.marketresearch.com and www.profound.com.
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SOURCE The Freedonia Group