BRAZIL: AmBev acquires Dominican business
The Brazilian brewer Companhia de Bebidas das Americas (AmBev) said today that it is to enter the Dominican Republic's beverage market, competing in both the beer and soft drinks segments.
The world's fifth largest brewer has signed an agreement with Embotelladora Dominicana CXA (Embodom), PepsiCo's exclusive bottler for that country.
AmBev will acquire a 51% stake at Embodom for US$60m due in three installments: US$40m in February 2004, US$10m in February 2005 and US$10m in February 2006.
However, AmBev will finish with a 66% stake in the company via an asset contribution to Embodom, composed of US$10m in cash and an operational beer production plant, built with existing assets from AmBev.
"Upon the conclusion of this transaction AmBev and Embodom will be partners in a company that will commercialize both soft drinks and beer in the Dominican beverage market, in which AmBev will hold a 66% stake," the Brazilian company said in a statement.
Embodom currently holds a leadership position in the Dominican soft drinks market, with a market share of 56.0% as of November 2003, according to EMEVENCA data. The company sells PepsiCo's core soft drinks brands (Pepsi Cola, Seven Up and Mirinda), as well as its own brand Red Rock. Embodom has one bottling plant with capacity to produce 2.3m hectoliters per year, which is located in the city of Santo Domingo. Besides the plant, the company counts on 25 distribution centers across the country, servicing the whole Dominican beverage market.
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