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Valspar shareholders approve sale to Sherwin-Williams

Valspar and Lowe’s unveil an all-new label for its line of paint available at Lowe’s stores nationwide. Inside the can, the superior-quality paint remains unchanged. Valspar shareholders on Wednesday, June 29, 2016, approved the sale of the paint-making company to Sherwin-Williams. (PR Newswire)
By Dee Depass Tribune News Service

MINNEAPOLIS – Shareholders of Valspar Corp. approved the sale of the paint-making firm to the larger Sherwin-Williams Wednesday during a special shareholders meeting held in downtown Minneapolis.

The vote and meeting, run by Valspar’s General Counsel Rolf Engh, gave one of two approvals needed to finalize the deal, worth an estimated $11.3 billion.

The deal still must be approved by federal regulators, who have already requested at least two rounds of additional information so it can evaluate antitrust concerns. Shareholders of Sherwin Williams do not need to vote on the deal.

Cleveland-based Sherwin-Williams announced in March that it planned to pay $113 a share in cash for Valspar, which makes paints and industrial and package coatings. If the biggest deal in Sherwin-Williams’ 150-year history closes in the first quarter of 2017, as expected, the combined company will boast $15.6 billion in annual revenue, $2.8 billion in profits and 58,000 employees and customers in more than 115 countries.

The merged company is likely to be based in Cleveland, leaving employment in Minneapolis uncertain.

Two years ago, Valspar finished a $40 million renovation of its 111-year-old headquarters in downtown Minneapolis.

Valspar’s four-building complex now houses a state-of-the-art research-and-development center, corporate offices and more than 400 employees, including 110 scientists. Valspar also has a floor in an office building downtown.

In speaking with shareholders Wednesday morning, Engh said that stockholders voting mostly by proxy had approved the merger between the two companies, as well as a change in control clause that will enrich top managers.

According to a proxy filing issued last month, Valspar CEO Gary E. Hendrickson is expected to receive a severance of roughly $38.1 million in combined cash, equity and benefits. The bulk of Hendrickson’s payment will be $30.3 million in stock options and restricted stock, along with $7.7 million in cash severance and about $91,000 in insurance and outplacement service costs.

Hendrickson participated in Wednesday’s special meeting by phone from Asia, where he was attending a previously scheduled event. There was no question and answer session held during the meeting.

Other top executives to benefit from the severance policy include Chief Financial Officer James Muehlbauer, who is set to receive roughly $11.1 million in combined cash, equity and benefits.

Engh, who is Valspar’s executive vice president as well as its general counsel, is slated to receive $5 million in combined compensation. Howard Heckes, the president of Valspar’s global coatings business, would receive $7.7 million and Les Ireland, Valspar’s president of consumer paints, would receive $5.5 million.

Shares of Valspar stock fell 23 cents a share to $107.38 in trading Wednesday.