Fitch Places Sherwin-Williams' Ratings on Watch Negative

  Fitch Places Sherwin-Williams' Ratings on Watch Negative

Business Wire

CHICAGO -- November 13, 2012

Fitch Ratings has placed The Sherwin-Williams Company's (NYSE: SHW) ratings on
Rating Watch Negative following the company's proposed acquisition of
Consorcio Comex, S.A. de C.V. (Comex). SHW has signed a definitive agreement
to acquire Comex for $2.34 billion, including assumed debt, in an all-cash
transaction. The transaction is expected to close during the first quarter of
2013.

Fitch has placed SHW's ratings on Watch Negative as follows:

--IDR 'A';

--Revolving bank credit facilities 'A';

--Senior unsecured debt 'A';

--Short-term IDR 'F1';

--Commercial paper (CP) 'F1'.

Comex is a privately held business with operations in Latin America, the U.S.
and Canada. In 2011, the company had $1.4 billion of sales, 66% of which was
generated in Mexico and the remaining 34% in the U.S. and Canada. Comex
manufactures and sells architectural and industrial coatings in Mexico through
3,300 points of sale operated by 750 independent concessionaires. In the U.S.,
Comex sells paint and coatings products under a variety of brand names through
240 company-operated paint stores. In Canada, the company markets multiple
brands of paint and coatings through 78 company-operated paint stores and
approximately 1,500 independent paint dealers.

The proposed acquisition has good strategic rationale for SHW. The acquisition
augments its current business mix and provides the company with a meaningful
controlled distribution platform in Mexico, the western U.S. and Canada, where
its store count is currently low. The acquisition also improves SHW's scale
throughout Latin America and provides the company with strong brand names in
that region.

While Fitch views the transaction as strategically positive for SHW, the
company's long- and short-term IDRs are likely to be downgraded to 'A-' and
'F2', respectively, given the large amount of debt to be assumed in the
acquisition and the resulting increase in leverage. Leverage as measured by
debt to EBITDA will increase from 0.8x for the LTM period ending Sept. 30,
2012 to approximately 3x at the close of the transaction. (This assumes that
SHW borrows roughly $2.4 billion of debt and does not include EBITDA
contribution from Comex.) Fitch expects leverage will remain at or above 2x
for the 18-24 months following the closing of the transaction with the
expectation of some debt repayment and EBITDA contribution from Comex.

Fitch expects to resolve the Rating Watch Negative upon the closing of the
transaction and review of SHW's financial profile.

Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology' (Aug. 8, 2012).

Applicable Criteria and Related Research:

Corporate Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=684460

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Contact:

Fitch Ratings
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Director
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or
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