We don’t yet know how many workers will be laid off once Sherwin-Williams completes its $11.3 billion acquisition of Valspar Corp. However, we now know what the separation agreements will be.
Minneapolis-based Valspar filed those details with the Securities and Exchange Commission this week.
Under the plan, affected employees who are not under union contract and now participate in Valspar’s “annual equity RSU program” would receive 26 to 36 weeks of pay. Other nonunion employees would get 12 to 26 weeks of their base pay. Contracted bonuses would be paid out on a prorated basis, executives said.
Valspar’s sale to its much bigger rival isn’t expected to finalize for at least a year.
Workers who are laid off after the merger will get job- placement help from a firm to be chosen by Sherwin-Williams, the SEC documents said.
The “merger is all about growth. Valspar’s and Sherwin-Williams’ businesses are largely complementary and the limited overlap means that there will be significant career opportunities for the vast majority of Valspar employees,” Gary Hendrickson, chairman and CEO of Valspar, said in a letter to employees that accompanied the information on severance packages.
That has done little to calm jitters of corporate staffers in Minneapolis, where Valspar has 600 employees including corporate and research workers. Most work is in the newly renovated and 112-year-old headquarters complex in east Minneapolis. Valspar spent $40 million two years ago renovating the site into new offices and state-of-the-art R&D labs.
After the acquisition, Valspar will officially become part of Sherwin-Williams, which is based in Cleveland. Duplicative positions are expected to be eliminated.
Sherwin-Williams may decide to shed its Minneapolis corporate office jobs but retain Valspar’s newly renovated labs and scientists, analysts said.
Sherwin-Williams CEO John Morikis declined to give details about the fate of Valspar’s Minneapolis operations when announcing the deal last month. He did say the deal will generate $280 million to $320 million in synergistic savings over two years.
In his SEC filing, Hendrickson acknowledged the uncertainty felt by Valspar workers. “We recognize that some employees may have concerns about their future role in the combined company and know that this may be an unsettling time, in spite of the opportunities it represents,” he said. “For this reason, we are adopting a very generous severance program to create incentives for employees to remain with the company and to provide a safety net for any employees that may ultimately be affected after the closing of the transaction.”
Valspar’s stock rose 9 cents to close at $107.04 Friday, That’s up significantly from the $83 price that existed before the acquisition was announced March 20. Sherwin-Williams stock rose $1.93 to close at $296.43 Friday.
With Valspar, Sherwin-Williams will dramatically increase its international reach. Valspar operates in at least 28 countries, with eight factories in China alone.