Sherwin-Williams (NYSE: SHW) announced that it has met with the Federal Economic Competition Commission (FECC) in Mexico to discuss the remedies required by the Commission as a condition of regulatory approval related to the acquisition of Comex business in Mexico.
Sherwin-Williams, in Nov 2012, agreed to buy Comex for roughly $2.34 billion, including debt. The company, in Sep 2013, completed the acquisition of the U.S. and Canadian businesses of Comex for $90 million in cash and assumed liability of around $75 million.
Comex is engaged in selling 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.
While the company has closed the takeover of the U.S. and Canadian businesses, it is yet to secure the green light from the Federal Competition Commission of Mexico to complete the acquisition of Comex's core Mexican operations.
Sherwin-Williams' appeal related to the pending acquisition of Comex's Mexican business was denied and the acquisition was declared unauthorized by the FECC in Nov 2013. Sherwin-Williams is reviewing the Commission's decision and reconsidering all options including resubmission of the appeal with the Mexican regulators.
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 the Americas.
Sherwin-Williams, which is one of leading paints companies along with PPG Industries Inc. (NYSE: PPG), currently retains a Zacks Rank #3 (Hold).
Other paint companies worth considering are RPM International Inc. (NYSE: RPM) and The Valspar Corporation (NYSE: VAL). Both retain a Zacks Rank #2 (Buy).
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
PPG INDS INC (NYSE: PPG): Free Stock Analysis Report
RPM INTL INC (NYSE: RPM): Free Stock Analysis Report
SHERWIN WILLIAM (NYSE:
VALSPAR CORP (NYSE: VAL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research