BRAZIL: AmBev and Groupe Danone Sign a Stock Option Purchase Agreement Of an Uruguayan Company
Salus produces the Patricia brand and has a 24% market share in Uruguay. In the country's capital, Montevideo, Patricia is the leader with a 36.5% market share. In the Uruguayan mineral water market, Salus has a 42% share -- 62.2% in the capital. In the beer market, the company faces the competition of Fabrica Nacional de Cerveja (51%) and of Cervejaria e Maltaria Paysandu (22%).
Salus, one of the most traditional Uruguayan companies, had net sales of US$30 million in 1999. It produced 190 thousand hectoliters of beer and 850 thousand hectoliters of mineral water during that year. The company has 2 industrial plants -- one for mineral water bottling and another one for beer and soft drinks -- both located in Serra de Minas, 110 kilometers away from Montevideo. It employs 430 people and has 36 exclusive outsourced distributors.
Should this option be performed it will be the first AmBev's acquisition after the merger between Antarctica and Brahma was approved on March 30th. This acquisition will also be the reinforcement of AmBev's multinational vocation, whose international expansion will be primarily focussed on the Latin American market. The company already operates in this region with Compania Cervecera Nacional, in Venezuela, and the Compania Cervecera Brahma Argentina, whose operations have both started up in 1994. The company holds a 10% and 14% market shares in Venezuela and Angentina, respectively.
In this association, AmBev and Groupe Danone expect to capitalize on gains due to synergies obtained from each company capabilities. AmBev and Danone already have a product distribution partnership in Argentina. According to AmBev, the partnership is strategic due to the French company expertise in the global mineral water market, where it detains the second largest share. The interest of both companies for Salus is explained by the Patricia brand strong penetration and to the clear leadership in the local mineral water market.
The Uruguayan beverage market sizes 5 million hectoliters, which represents a consumption rate of 146 liters/inhabitant/year. The consumption rate is 140 liters/inhabitant/year in Brazil. The largest markets by volume are the mineral water (31.4%) and the soft drinks (also 31.4%) ones. In the soft drinks segment Salus has products made of grapefruit and orange. Wine represents 21% of the consumption while beer represents 16.3%. The market shares by volume in Brazil are 54.2% for soft drinks, 39.4 for beer, 5.3 for water and 1% for wine.
For additional information please contact AmBev Investor Relations: Milton Cabral Filho, (5511) 3741-7560, email@example.com or Vanessa Barion, (5511) 3741-7553, firstname.lastname@example.org
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