PPGIndustries Inc. agreed to buy Consorcio Comex SA for about $2.3 billion, picking off the Mexican coatings and paint maker that competitor Sherwin- Williams Co. failed to buy because of antitrust issues.
Acquiring closely held Comex will givePPGpaint-making capacity in Mexico and Central America and sales through about 3,600 stores in the region, Pittsburgh-basedPPGsaid in a statement.PPGrose 5.6 percent in pre-market trading.
Sherwin-Williams., a U.S. rival toPPG, made a $2.34 billion bid for Comex in 2012 in an attempt to double Latin American sales. That deal was blocked by Mexican regulators, who said the combined company would have had a market share of as much as 58 percent, depending on the product, or up to 10 times that of the nearest competitor.PPGhas a smaller presence in Mexico than Sherwin-Williams.
“The acquisition is very complementary toPPGas it adds a leading architectural coatings business in Mexico and Central America, a region where we have negligible architectural coatings presence,” Charles E. Bunch, PPG’s chairman and chief executive officer, said in the statement.
Sherwin-Williams acquired Comex’s U.S. and Canada operations for $165 million in September and terminated the offer for the rest of the company in April.
PPGwill use cash at hand and may also issue debt to fund the Comex deal. Excluding acquisition costs, the deal will immediately add to earnings, it said. Its shares gained to $213.95 at 8:51 a.m. before the start of regular trading in New York.
Comex, funded in 1952, had sales of about $1 billion in 2013, according to the statement.