) has completed its takeover of the U.S. and Canadian businesses
of Mexico's leading paint company Consorcio Comex S.A. de C.V.
for $90 million in cash and assumed liability of around $75
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The acquisition is a strategic fit for Sherwin-Williams and will
enable it to better serve its customers across some of its key
markets. The company plans to offer more color on the acquisition
in its third-quarter earnings call on Oct 25.
Comex sells paints and coatings under a host of brands in the
U.S. and Canada. Its operations across these markets consist of
234 and 80 company operated stores in the U.S. and Canada,
respectively. It also has 5 manufacturing sites in the U.S. and 3
in Canada. Moreover, Comex provides paint and coatings products
to roughly 1,500 external retail locations in Canada.
Sherwin-Williams, in Nov 2012, agreed to buy Comex for roughly
$2.34 billion, including debt. While the company has closed the
takeover of its U.S. and Canadian businesses, it remains
committed to secure the green light from the Federal Competition
Commission of Mexico to complete the acquisition of Comex's core
The Mexican antitrust regulator, in Jul 2013, rejected the deal
in a 3-2 vote citing that the merger would allow the combined
company to set artificially high prices and commit
anti-competitive practices, thereby damaging consumer interests.
Sherwin-Williams' shares were hammered by the news, shedding as
much as around 11%.
The acquisition of Comex, the largest in the company's history,
will enable Sherwin-Williams to expand its presence in those
markets where its store count is low. Moreover, it will allow
Sherwin-Williams to reinforce its architectural paint business in
Sherwin-Williams, which is among the leading paints companies
), follows a strategy of growth through acquisitions and internal
initiatives such as efficient working capital management and
innovation. Its philosophy is to diversify its customer base and
expand its operations into various geographies.
Sherwin-Williams continues to invest in its Paint Stores Group
segment to boost market share and is implementing effective
pricing strategies to offset higher raw material costs. However,
its Latin American operations are facing soft end-market demand
and currency headwinds.
Sherwin-Williams is a Zacks Rank #4 (Sell) stock.