That sounds like pretty good coin for a guy of limited defensive value who's about to turn 34, but it's probably not close to what he was anticipating. The baseball marketplace this year appears glutted with right-handed sluggers. Chris Carter tied for the NL lead in homers; he got cut loose and remains a free agent. Mark Trumbo led all of baseball in homers (47); he's still unsigned. And remember, the Orioles only had to give up a backup catcher to get him last winter. Encarnacion essentially replaces Mike Napoli (34 homers) with Cleveland; Napoli is a free agent.
Encarnacion is better (but older) than Carter or Trumbo; he's better (and slightly younger) than Napoli too. But they are all the same kind of player, and that has served to depress the market for any one of them.
Meanwhile, the Twins appear to be stockpiling first base/DH types of a less-established level:
All of these players could play 1B/DH for the Red Wings in 2017: Byungho Park, Kennys Vargas, Matt Hague, Reynaldo Rodriguez, Dalton Hicks.— Seth Stohs (@SethTweets) December 21, 2016
I would expect one of those first two to be in Minnesota sharing the first base/DH roles with Joe Mauer, but even so, that's more 1B/DHs than a Triple A team really needs. And it's not like there's going to be any sort of trade value to the surplus. If guys like Napoli and Trumbo are jobless at Christmas time, there isn't going to be a line of teams looking to surrender something for someone like Vargas.