Mexico’s Comex sues Sherwin-Williams

Mexican paint company Consorcio Comex has announced that it is suing Sherwin-Williams over the USA paint maker’s failed attempt to acquire it, arguing that the USA company had not tried hard enough to honour a deal struck between the two.

Sherwin-Williams said in November 2012 it had signed an agreement to purchase Comex for US$2.34bn but the deal was rejected twice by Mexico’s federal competition watchdog on the grounds it would create unfair market conditions. Mexico’s Federal Economic Competition Commission (COFECE) said the tie-up would create a company with around 50% of Mexico’s paint market, which would make it eight times bigger than its nearest competitor.

After the second rejection last October, Sherwin-Williams had until March 31 to change the offer but its efforts to get the approval of COFECE in that period were ‘well below’ the standards set out in the purchase agreement, Comex said.

Comex said it had asked for the International Chamber of Commerce to arbitrate in its dispute with Sherwin-Williams, which terminated the purchase agreement in April. A family owned company founded in the 1950s, Comex is seeking unspecified damages.