WASHINGTON – Paint and stain company Sherwin-Williams has agreed to spin off two of Valspar’s wood coatings plants as a condition of an $11.3 billion deal, the U.S. Federal Trade Commission announced Friday.
The two plants – one in Cornwall, Ont. and the other in High Point, N.C. – will be sold to Axalta Coatings Systems Ltd. in Philadelphia, Pa.
Axalta is a leading supplier of coatings for large automotive and industrial equipment.
Valspar Corporation is headquartered in Minneapolis, Minn.
The proposed agreement is meant to settle a complaint the Sherwin-Williams purchase of Valspar Corporation would reduce competition and create “unilateral market power” in an industry with very few players.
As part of the consent agreement, Axalta would also receive research and development facilities, warehouses and testing facilities that belong to Valspar’s wood coatings division.
According to Cleveland.com, the Cornwall and High Point plants and the other assets were sold to Axalta for $420 million in cash.
The FTC believes Axalta is “well positioned” to operate the two plants as “an effective competitor” and would maintain competition in the marketplace.
The FTC condition is subject to a 30 day public review, which expires June 27, 2017.
The deal between Sherwin-Williams and Valspar Corporation has been in the works for over a year and is expected to close June 1. It will make Sherwin-Williams one of the largest paint companies in the world.
The 67,000 square foot Cornwall plant at 1915 Second Street West has about 100 employees.