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PPG’s Play for Comex Gets Green Light

Tuesday, November 4, 2014

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Anti-trust regulators in Mexico have approved PPG’s plan to acquire the country’s largest paint manufacturer for $2.3 billion.

PPG Industries Inc. announced Friday (Oct. 31) that it had received the green light from the Mexican Economic Competition Commission to buy Consorcio Comex.

Images: PPG

Pittsburgh, PA-based PPG Industries Inc. has received approval from regulators to buy Comex, headquartered in Mexico City. The agreement was first announced June 30.

News of the favorable ruling comes almost three weeks after PPG said that authorities needed more time to review the deal.

The Pittsburgh, PA-based coatings manufacturer expects to close the transaction—first announced June 30—over the next several days, according to Charles E. Bunch, PPG chairman and CEO.

Approvals Complete

PPG said it had received approval from the National Foreign Investment Commission of Mexico in mid-October.

PPG President

PPG President and CEO Charles E. Bunch says the deal will boost business in a region where the company has "negligible" reach.

“We are pleased to have received all the necessary government approvals for the Comex acquisition,” Bunch said in a statement.

“[…] We look forward to growing the region with Comex customers and employees.”

Closing the Deal

PPG plans to finance the transaction using cash on hand and debt. At the end of the third quarter of this year, PPG reported cash and short-term investments of $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 exterior

Comex reported sales of approximately $1 billion in 2013.

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

The company’s brands include Acqua100, Meridian, Via Color, Polyform, and Comex Industrial Coatings.

Comex reported sales of approximately $1 billion in 2013.

Boosting Business

PPG expects the deal to contribute up to 75 cents to its earnings-per-share from 2015, excluding non-recurring acquisition and transaction-related costs.

PPG also intends to generate about $40 million in acquisition-related synergies across two years, according to the company.

Comex President

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

The deal will boost PPG’s architectural coatings business in a region where the company has “negligible” reach, said Bunch.

Failed Attempts

PPG is not the only U.S.-based coatings company that has had an interest in acquiring Comex operations.

In September 2013, Sherwin-Williams completed the acquisition of the company’s U.S. and Canada business for $90 million.

However, the Mexican competition commission twice denied Sherwin-Williams’ attempts to purchase Comex in Mexico, finally prompting the Cleveland-based coatings 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.


Tagged categories: Acquisitions; Business matters; Business operations; Coatings manufacturers; Coatings Technology; Comex; Latin America; North America; PPG; Sherwin-Williams

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