PPG Industries (IW 500/81) (PPG) said today it has agreed to buy Mexico City-based coatings manufacturer Consorcio Comex with an eye toward boosting its architectural coatings business in Mexico and Central America.
PPG's $2.3 billion acquisition of Comex comes on the heels of the dissolution of a similar proposed deal between Comex and Sherwin-Williams (IW 500/113) (SHW). That deal, which had been in the works for two years, was being challenged by Mexico antitrust authorities. Sherwin-Williams terminated it on April 4.
Comex makes coatings and related products in Mexico and sells them there and in Central America through 3,600 stores owned and operated by 700 concessionaires. The company also sells its products through regional retailers and wholesalers and via direct sales to customers.
Comex, a privately held company founded in 1952, employs 3,900. It has eight manufacturing facilities and six distribution centers and posted sales of about $1 billion in 2013. The company's brands include Comex, Effex and Texturi.
PPG Chairman and CEO Charles E. Bunch said the acquisition "is very complementary to PPG as it adds a leading architectural coatings business in Mexico and Central America, a region where we have negligible architectural coatings presence."
Comex CEO Marcos Achar Levy said the deal "gives us new opportunities and synergies that will allow us to significantly grow in our markets."
Bunch said PPG plans to fund the transaction mainly with cash and short-term investments but may fund part of it with added debt. PPG expects the deal to add immediately to its earnings, and it projects that it will achieve acquisition-related cost savings of 3% to 4% of acquired sales over a two-year period, Bunch said.
PPG shares were up 2.8% to $209.98 in midday trading on Monday.
