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S-W Still Pursuing Comex Deal

Thursday, March 13, 2014

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Months after its bid was twice rejected, the Sherwin-Williams Co. still has designs on Central and South America's largest paint producer.

After a winter of silence on the plan, the Cleveland-based paint and coatings maker announced last week that it was in discussions with Mexican trade authorities about its long-running effort to acquire the Comex Group.

Sherwin-Williams announced plans for the $2.34 billion acquisition of Comex in November 2012, calling the two companies "an ideal fit in every respect."

Sherwin-Williams
The Sherwin-Williams Company

The U.S.'s largest paint retailer expanded in September with the $90 million acquisition of Comex's North American portfolio. Mexican regulators blocked the rest of the deal.

The Comex Group, headquartered in Mexico City, manufactures and sells architectural and industrial coatings throughout Latin America, the U.S. and Canada. Sales generated about $1.4 billion in 2011.

Sherwin-Williams wants Comex in order to establish a major presence in Latin America.

Sherwin-Williams completed the $90 million acquisition of Comex's North American business on September 2013, but the Federal Competition Commission of Mexico blocked the acquisition of Comex's Mexico operation—by far, the largest part of its business. Several months later, the commission rejected the paint maker's appeal of the decision.

Sherwin-Williams said in October that it was reviewing its options for the deal.

'Ongoing Effort'

On March 7, Sherwin-Williams announced in a brief statement that it had met with the commission in Mexico "to discuss the Company's ongoing effort to acquire the Comex business in Mexico."

Sherwin-Williams said it had not refiled its appeal to the commission.

Comex Group
Comex Group

Based in Mexico City, the Comex Group is the largest paint and coatings manufacturer in Central and South America. Sherwin-Williams has been trying to buy the business.

"The purpose of this meeting was to discuss various issues relating to potential remedies required by the Commission as a condition of regulatory approval of the transaction," said the statement, Sherwin-Williams' first word on the matter in five months.

No additional details were provided.

PPG Drops Comex

Meanwhile, in an apparently unrelated move, PPG Industries’ Protective and Marine Coatings (PMC) business has terminated its licensee agreement with Comex.

PPG announced this week that it would be sell and service its Amercoat brand in Mexico directly, rather than through Comex.

The Pittsburgh-based coating supplier did not give a reason for terminating  the deal, but said in a brief announcement that the change would allow PPG to work "more closely with our customers."

'Tremendous Growth Market'

“We view Mexico as a tremendous growth market,” said Diane Kappas, PPG vice president, Americas, PMC.

Gillette Stadium
PPG

PPG will sell its Amercoat products directly in Mexico, rather than using Comex as a distributor. Amercoat was used on the Gillette Stadium, which opened in 2002.

“By working more closely with our customers, we believe we can enhance their competitive advantage, not just through the strength of our product offering but with advanced levels of technical and sales support.”

PPG made a similar announcement last July about its Amercoat distribution in Canada.

Products sold and serviced by PPG in Mexico include Amerlock epoxies for protecting steel and concrete structures; Dimetcote inorganic zinc primers, for protectug carbon steel against corrosion; and PSX 700 polysiloxane topoat for various protective and marine segments.

These and other Amercoat products by PPG can now be ordered in Mexico by calling +52-427-271-9923+52-427-271-9923 or +52-427-271-9179+52-427-271-9179.

   

Tagged categories: Comex; Distributors; Mergers; PPG; Sherwin-Williams

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