Chairman and Chief Executive Christopher M. Connor said: "We are disappointed by this decision, but remain hopeful that we can adequately address the Commission's objections and proceed with the transaction."
CLEVELAND, Ohio -- Sherwin-Williams Co. today said Mexican regulators have voted 3-2 against its plans to acquire Mexican paint company Consorcio Comex.
That overshadowed the news that it had rung up record sales and net income per common share in the second quarter of 2013, and sent shares tumbling.
"Last evening the Federal Competition Commission of Mexico informed the Company that by a 3-2 vote the acquisition of Consorcio Comex, S.A. de C.V. announced on November 12, 2012 was not authorized by the Commission," the Cleveland paint company said in a statement.
It did not say why the commission voted the way it did, but said "the Company is reviewing the rationale for the Commission's decision and expects to respond to the Commission's concerns in the near future."
Chairman and Chief Executive Christopher M. Connor said: "We are disappointed by this decision, but remain hopeful that we can adequately address the Commission's objections and proceed with the transaction." Company officials said they would provide more information during today's conference call with analysts.
The $2.34 billion acquisition of ComexConsorcio Comex, a 61-year-old, family-owned paint retailer with 3,618 stores in North America, would double Sherwin-Williams' store count and be the largest acquisition in company history. The Mexican commission had been expected to approve the deal, as its U.S. counterparts had done.
In a separate announcement, Sherwin-Williams said its net sales for the second quarter rose 5.5 percent to a record $2.71 billion, compared to $2.57 billion last year. Results were driven by its paint stores and global finishes groups.
Net sales at stores open at least a year, called same-store sales, rose 7 percent.
For the three months that ended June 30, net income increased 13 percent to $257.3 million, from $227.8 million for the second quarter of 2013.
Diluted net income per common share increased 13.4 percent to a record $2.46 per share, up from $2.17 per share last year.
Sherwin-Williams' shares had dropped more than $14 per share by mid-morning, down from Wednesday's close of $183.19 on the New York Stock Exchange.
Follow me on twitter: @janetcho
