* Deal will help PPG expand paints offering in Mexico, Central America
* Deal comes after Sherwin-Williams's failed bid for Comex (Adds background on PPG, commment from company spokesman)
MEXICO CITY, June 30 (Reuters) - U.S. chemicals maker PPG Industries Inc said on Monday it had agreed to buy paints maker Consorcio Comex SA de CV for $2.3 billion after the Mexican company's deal to sell to U.S. rival Sherwin-Williams Co fell through.
PPG Industries, whose shares were up 3 percent in afternoon trading on the New York Stock Exchange, said in a joint statement with Comex that it plans to fund the acquisition primarily with currently held cash and short-term investments. The U.S. company added that it may fund part of the purchase price with debt.
Mexico's federal competition authority twice rejected Sherwin-Williams' proposed $2.34 billion takeover offer for Comex last year, saying it would create unfair market conditions.
Comex, a family-owned company founded in 1952, said in May it was suing Sherwin-Williams because it had not tried hard enough to honor the takeover agreement.
The PPG deal is still subject to regulatory approvals but the Mexican company said it was confident it would go through.
"Being part of PPG gives us new growth opportunities and synergies," Comex Chief Executive Officer Marcos Achar Levy said.
Mexico's competition authority did not immediately respond to request for comment on the deal.
Privately held Comex has eight manufacturing plants and six distribution centers and had sales of about $1 billion in 2013.
PPG said in April that its board had authorized a $2 billion share repurchase agreement.
The purchase would be the latest in a string of Latin American investments PPG has made in recent months. In June, the company said it would invest $40 million in expanding its coating manufacturing plant in Brazil.
In March, PPG said it would acquire Panama-based Canal Supplies, a manufacturer of protective marine coatings.
Earlier that month, the company said it would invest more than $27 million in its coating manufacturing plant in San Juan del Rio, in central Mexico.
PPG is based in Pittsburgh and operates in nearly 70 countries around the world.
The U.S. company, which reported net sales of $15.1 billion in 2013 with Latin America sales of $718 million, hopes the Comex deal will help expand its paints offering in Mexico and Central America.
"The acquisition is very complementary to PPG as it adds a leading architectural coatings business in Mexico and Central America, a region where PPG has negligible architectural coatings presence," said company spokesman Mark Silvey.
(Reporting by Gabriel Stargardter in Mexico City and Swetha Gopinath in Bangalore; Editing by Saumyadeb Chakrabarty and Tom Brown)