Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Mexican competition authority declines to approve combination of paint manufacturers, (Oct 31, 2013)

By Tobias J. Gillett, J.D., LL.M.

The Comision Federal de Competencia Economica, Mexico’s antitrust authority, has unanimously rejected Sherwin-Williams Company’s appeal from the agency’s decision refusing to authorize its proposed acquisition of Consorcio Comex, S.A. de C.V., a Mexican paintings and coatings manufacturer, the agency announced yesterday.

The Comision noted that the combined entity would have a market share on the order of 50 percent and would be eight times larger than its nearest competitor. The Comision believed that the market power of the combined entity would pose a threat to competition and that conditions offered by Sherwin-Williams in an attempt to resolve the Comision’s concerns were not sufficient.

Sherwin-Williams response. Sherwin-Williams issued a statement responding to the Comision’s decision.

“The Sherwin-Williams Company announced that the Federal Economic Competition Commission of Mexico informed the Company last evening that the Company’s appeal relating to its pending acquisition of Consorcio Comex, S.A. de C.V. was denied and the acquisition is not authorized,” the statement read. “The company is currently reviewing the Commission’s decision and is considering all options, including whether to refile with the Commission.”

Sherwin-Williams announced on November 12, 2012, that it had entered into an agreement to acquire ConsorcioComex for approximately $2.34 billion. On July 17, 2013, however, the Comision voted not to approve the transaction by a 3-2 vote. On September 16, 2013, Sherwin-Williams revealed that it had completed the acquisition of Consorcio Comex’s U.S. and Canadian businesses, in the process paying $90 million in cash and assuming liabilities valued in the range of $75 million.

Companies: Sherwin-Williams Co.; Consorcio Comex, S.A. de C.V.

News: Antitrust