CLEVELAND (AP) — Sherwin-Williams Co. said Friday that it is ending its plans to buy the Mexico business of paints and coatings company Consorcio Comex.
The Cleveland-based paint company had agreed in 2012 to buy Consorcio Comex in a deal valued at $2.34 billion, including debt, to increase its presence in certain markets.
It completed its acquisition of the U.S. and Canadian business in 2013, paying $90 million in cash and assuming debt of $75 million. But regulators in Mexico refused to clear its buyout of Comex’s Mexico operations due to concerns about the combination limiting competition there.
Sherwin-Williams said that both companies had the right to cancel the deal if it did not close by the end of March. But it says Comex has accused the company of not using “reasonable efforts” to complete the deal as required, thereby breaching the contract.
The paint company said it is asking the New York Supreme Court to say it complied with those deal terms.
A representative for Comex could not be reached for comment. Sherwin-Williams said it will discuss the matter further when it reports its first-quarter results on April 17.
Consorcio Comex SA de CV sells paints and coatings in the United States and Canada, and it sells architectural and industrial coatings in Mexico. It runs stores and works with other paint dealers.
Shares of the U.S. paint company fell $6.55, or 3.3 percent, to close at $193.89 Friday.