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Mexico Extends Review of PPG Deal

Friday, October 17, 2014

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Mexican antitrust regulators need more time to examine PPG’s $2.3 billion deal to acquire the country’s largest paint company.

PPG Industries Inc. announced Monday (Oct. 13) that it had received notice from Mexico’s Federal Economic Competition Commission that the agency was extending the review timeline for PPG’s previously announced agreement to buy Consorcio Comex, S.A. de C.V. (Comex Group).

Comex Group
Comex Group

PPG is the second U.S. paint company to make a play to acquire Comex, a leading paint company south of the border. Regulators refused to approve a deal proposed by Sherwin-Williams, causing the company to end its bid.

PPG said it had expected the extension, "given the magnitude of the transaction." The announcement came just days before the commission would have been required to rule on the regulatory filing.

The Pittsburgh, PA-coating maker expects approval of the deal and closure in its fourth quarter.

The competition commission twice denied Sherwin-Williams’ attempts to purchase Comex, finally prompting the Cleveland-based company to end its pursuit. Regulators had expressed concern about a potential monopoly on market share.

Sellers on behalf of Comex have since filed a lawsuit against Sherwin-Williams regarding the failure of that transaction.

$2.3B Offer

PPG announced June 30 that it had reached a definitive agreement to acquire Comex in a transaction valued at $2.3 billion.

Comex, headquartered in Mexico City, manufactures and sells industrial, protective, specialty and architectural coatings throughout Latin America. The company has approximately 3,600 stores that are independently owned and operated by more than 700 concessionaires.

Comex presentation
PPG Industries Inc.

PPG said it anticipated an extension by the competition commission, given the magnitude of the transaction. Comex reported sales of approximately $1 billion in 2013.

Founded in 1952, the privately held business operates eight manufacturing sites in Mexico, five in the U.S., and three in Canada, and has about 3,900 employees.

Comex reported sales of approximately $1 billion in 2013.

Plan in Motion

The acquisition, if approved, would boost PPG’s architectural coatings business in a region where the company has a “negligible” reach, according to Charles E. Bunch, PPG chairman and CEO.

“We are excited to participate in the growing Mexican economy and look forward to working with the Comex team as we integrate the business into PPG,” Bunch said when the deal was announced.

Commercial Contractor
PPG Industries Inc.

The acquisition, if approved, would boost PPG’s architectural coatings business in a region where the company has a “negligible” reach, according to Charles E. Bunch, PPG chairman and CEO.

Marcos Archar Levy, Comex CEO, said, “Being part of PPG gives us new opportunities and synergies that will allow us to continue to significantly grow in our markets."

At that time, the companies indicated then that it would take four to six months for the regulatory review.

PPG maintains this original projection, the company said Monday.


Tagged categories: Acquisitions; Architectural coatings; Business matters; Business operations; Coatings manufacturers; Coatings Technology; Comex; Latin America; Market share; North America; PPG; South America

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