just On Call: Coca-Cola FEMSA keeps eye on growth opportunities
The merger will allow Coca-Cola FEMSA to further leverage its geographical reach
Coca-Cola FEMSA has hailed its merger with Grupo Tampico and reiterated that it continues to look for acquisition opportunities.
Speaking on an analyst call yesterday (29 June), Coca-Cola FEMSA's CEO, Carlos Salazar Lomelin, said that the merger has triggered a new stage for the company and for the Coca-Cola system. Under the MXN6.55bn (US$555m) agreement announced yesterday, Coca-Cola FEMSA will give Grupo Tampico 63.5m newly issued shares valued at MXN103.20 pesos per share.
The merger, Lomelin told analysts, will allow the company to further leverage its geographical reach.
"We are confident that the combined skills of our bottling businesses ... will drive our prospects for significant future growth," he said. "We firmly believe that, with the combined efforts, we will elevate our commitments to the next level. Together we are now one strong team that looks to the future with optimism."
Combined, Tampico's beverage division and Coca-Cola FEMSA's Mexican operations will have sales volumes representing around 45% of the Coca-Cola system's total volumes in Mexico.
Beyond this, Lomelin reiterated that the company is committed to looking for acquisition opportunities both in Latin America and globally.
"We have a very, very healthy balance sheet in our company now," Lomelin said. "We have more than MXN1bn in cash and are therefore always looking for opportunities that could arise in the future. We want to create more value for our shareholders ... this may be through opportunities in Latin American and all over the world.
"We believe that in the future, the cash could transform our bottler operation in different countries and in different parts of the world," he added.
Coca-Cola FEMSA has always been open about its expansion ambitions. Early last year, Lomelin said the company was working on "rapid expansion", after reporting strong sales and profits for 2009.
In the second part of just-drinks' review of 2011, Michelle Russell looks at how the soft drinks category has fared in the last 12 months....
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