* Deal will help PPG expand paints offering in Mexico,
* Deal comes after Sherwin-Williams's failed bid for Comex
(Adds background on PPG, commment from company spokesman)
MEXICO CITY, June 30 U.S. chemicals maker PPG
Industries Inc said on Monday it had agreed to buy
paints maker Consorcio Comex SA de CV for $2.3 billion after the
Mexican company's deal to sell to U.S. rival Sherwin-Williams Co
PPG Industries, whose shares were up 3 percent in afternoon
trading on the New York Stock Exchange, said in a joint
statement with Comex that it plans to fund the acquisition
primarily with currently held cash and short-term investments.
The U.S. company added that it may fund part of the purchase
price with debt.
Mexico's federal competition authority twice rejected
Sherwin-Williams' proposed $2.34 billion takeover offer for
Comex last year, saying it would create unfair market
Comex, a family-owned company founded in 1952, said in May
it was suing Sherwin-Williams because it had not tried hard
enough to honor the takeover agreement.
The PPG deal is still subject to regulatory approvals but
the Mexican company said it was confident it would go through.
"Being part of PPG gives us new growth opportunities and
synergies," Comex Chief Executive Officer Marcos Achar Levy
Mexico's competition authority did not immediately respond
to request for comment on the deal.
Privately held Comex has eight manufacturing plants and six
distribution centers and had sales of about $1 billion in 2013.
PPG said in April that its board had authorized a $2 billion
share repurchase agreement.
The purchase would be the latest in a string of Latin
American investments PPG has made in recent months. In June, the
company said it would invest $40 million in expanding its
coating manufacturing plant in Brazil.
In March, PPG said it would acquire Panama-based Canal
Supplies, a manufacturer of protective marine coatings.
Earlier that month, the company said it would invest more
than $27 million in its coating manufacturing plant in San Juan
del Rio, in central Mexico.
PPG is based in Pittsburgh and operates in nearly 70
countries around the world.
The U.S. company, which reported net sales of $15.1 billion
in 2013 with Latin America sales of $718 million, hopes the
Comex deal will help expand its paints offering in Mexico and
"The acquisition is very complementary to PPG as it adds a
leading architectural coatings business in Mexico and Central
America, a region where PPG has negligible architectural
coatings presence," said company spokesman Mark Silvey.
(Reporting by Gabriel Stargardter in Mexico City and Swetha
Gopinath in Bangalore; Editing by Saumyadeb Chakrabarty and Tom