PPG Finalizes Comex Acquisition
Less than a week after PPG Industries announced that Mexican regulators had approved its $2.3 billion purchase of Consorcio Comex, the deal is done.
The Pittsburgh-based manufacturer announced late Wednesday (Nov. 5) that it had finalized the acquisition of Mexico's largest paint manufacturer—the second-largest acquisition in PPG's history.
The announcement came just days after PPG said that the Federal Economic Competition Commission of Mexico had green-lighted the deal, clearing the way for completion.
The deal gives PPG, already the world's largest paint and coating maker, a huge foothold in the booming Latin American coatings market—a rare area where the Pittsburgh company had had little presence.
Founded in 1952, Comex manufactures coatings and related products in Mexico and sells them in Mexico and Central America through more than 3,700 stores that are independently owned and operated by more than 700 concessionaires.
Comex also sells its products through regional retailers and wholesalers, and directly to customers. The company has approximately 3,900 employees, eight manufacturing facilities, and six distribution centers. Comex reported about $1 billion in sales in 2013.
The massive PPG deal sailed through without a hitch in just four months, after The Sherwin-Williams Co. struggled for nearly two years to make the same deal.
Both PPG President and CEO Charles E. Bunch (left) and Comex CEO Marcos Archar Levy saw major benefits for their companies in the $2.3 billion acquisition.
PPG first announced its bid for Comex on June 30. In October, the company said antitrust regulators needed more time to review the deal. On Friday (Oct. 31), however, PPG announced that Mexico had blessed the deal.
And by Wednesday, the ink was dry.
By contrast, Sherwin-Williams announced its $2.34 billion bid for Comex in November 2012.
Over the next 16 months, Mexican regulators twice shot down the biggest part of the deal: the purchase of Comex's Latin American business. (Sherwin-Williams, the largest U.S. paint retailer, completed the acquisition of Comex's North American business last year.)
The PPG deal went through in four months. Sherwin-Williams pushed a similar bid for 16 months but was unable to close the deal.
It may never be clear why the PPG bid did not raise the same concerns with Mexican regulators that the Sherwin-Williams proposal did. In any case, PPG was jubilant over the deal, said Charles E. Bunch, PPG chairman and CEO.
“We are pleased to have successfully completed this acquisition, the second-largest in our company’s history, as it adds a leading architectural coatings business in Mexico and Central America to our portfolio,” said Bunch.
“We look forward to working with the Comex team as we integrate the business into PPG."