Speak for Yourselves
- Mark Lipton
- 24 hours ago
- 3 min read
Updated: 3 hours ago
The Federal Trade Commission (FTC) blocked the sale of Liquid Nails construction adhesive to Henkel AG & Co. earlier this week, calling the move an “important victory” in fighting the rising costs of housing. Which seems grandiose considering construction adhesive accounts for just one-tenth of a percent of the cost to build a house, though it’s still hard to argue against the move, which would have allowed the merging of the top two brands.
The move was Pittsburgh CEO Brian Carson’s best chance to cash out since American Industrial Partners (AIP) acquired Liquid Nails, with Pittsburgh and a few other brands as part of the PPG divestiture.
Had the sale been allowed to go through, Henkel—owner of Loctite, the number one selling brand of construction adhesive—would have held a 60% market share. More than enough to act monopolistically, according to the government, which took seven days to make its case before a federal judge in New York, who ruled to block the deal.
The decision costs Carson and AIP $725 million, which must suck even when you’re rich.
With the gavel lowered on this case, Carson will be back to scrolling his contacts to identify another buyer. Which I give him some odds of finding, albeit at a much lower price than Henkel was willing to pay. If I were setting the line for Vegas on what Liquid Nails will ultimately sell for, I’d make the number closer to $450 million.
Though if it ends up on Polymarket I’ll probably bet the under.
Ace Hardware reported its second-quarter earnings last week, with revenues up 6% as compared to last year. Results in line with those from Sherwin, Home Depot and Lowe’s, which I detailed on a podcast you can find here.
Ace also reported a decrease in store traffic, down 1.9% as compared to last year, foreboding when considered with the University of Michigan’s Consumer Sentiment Index, which continues to test its lows. And the price of gas is not that high yet, though it seems that’s coming, buttressing my forecasts of high inflation with flat or declining demand for architectural coatings in all three channels. All the markings of stagflation, a grave economic condition some experts believe we are already enduring.
I’m Counting on You Heidi
Last week, the Secretary of Pennsylvania’s Department of Environmental Protection (DEP), Jessica Shirley, announced that the agency had entered into a consent order with Sherwin-Williams for its marauding of Rochester, going back to 2019. Shirley’s DEP fined Sherwin just $124,700 for poisoning that town, money the company made in the time it took Shirley to post that news, making her statement that the agreement “holds Sherwin-Williams accountable” closer to fraudulent than fanciful. Shirley added that the enforcement action “protects Pennsylvania air quality,” which is materially untrue, as only stopping the pollution could meet that threshold.
The order gives Sherwin until October 31st to install a thermal oxidizer, with the penalty for non-compliance coming in at just $1,000 per day, less than the cost to run the thermal ox! Easy money for Sherwin CEO Heidi Petz, who I’m counting on to put dollars before lives and miss that deadline.
Speaking of Heidi
A 24-year-old employee at Sherwin-Williams Global Headquarters in Cleveland took his own life with a handgun last week, while parked in that campus’ employee surface lot. The blast sent shockwaves through the staff in Cleveland, who continue to post about the tragedy on the subreddit for Sherwin-Williams employees. By the next morning, I was in contact with several dozen employees in the HQ, the vast majority of whom had reached out to me.
They complained of Petz’s depravity, in her refusal to close the building, keeping them in place as that scene was processed. Leaving employees overlooking the emergency response, scene processing and clean-up, a stupefying insensitivity even by Petz’s standards. Expressing both disrespect for the young man’s life and a contemptuous disregard for the spirits in her charge. Evidence that Ms. Petz is unfit for the job, as if we needed any more of that.
I vacillated over whether to post about the tragedy, deciding to do so the next morning, having heard from so many by then. Their messages and posts seem to express contempt for their employer, but I should let them speak for themselves.
