CARACAS: Mavesa, S.A. Announces Sale of Spring Water Business
The transaction involves the sale of the natural spring water source, the bottling plant, the Minalba and San Bernardo brands and other assets related to the operation of the spring water business. The sale is expected to close next month subject to normal due diligence, closing and legal procedures.
The spring water business represents about 1.5 percent of Mavesa's annual sales revenues. The Company will use the proceeds of this sale to implement initiatives related to the Company's growth strategy.
Commenting on this transaction Alberto Tovar, Mavesa's Chief Executive Officer said: "Though our initial plans were to keep developing the business, Pepsi-Cola Venezuela's proposal made us rethink its potential. The sale allows us to focus on other products where we have competitive advantages and to develop the brands that better fit into our overall growth strategy. Mavesa remains optimistic about the forecast growth of volume and profitability in the Beverages Business Unit's fruit juice and powdered chocolate mix brands, where the company has rapidly achieved the leadership within the Venezuelan market. We plan to introduce new products and pursue marketing and distribution strategies to support them."
He added, "While we also believe that our plan to grow and differentiate the Minalba product line would have provided good levels of profitability eventually, it required additional near term investments. Pepsi-Cola Venezuela will be able to attain this same product development more rapidly, due to important synergies with their wide soft drink distribution system."
Mr. Lorenzo Mendoza, Empresas Polar's Chief Executive Officer, said: "Our Company is committed to continue developing the beverage industry with leading quality brands. Considering that bottled water is one of the fastest growing segments of this market, this acquisition will provide the Company with the production capacity needed to satisfy a growing demand, as well as the leading brand, Minalba. We expect to increase dramatically Minalba's distribution levels and become the segment leaders in the short term. Today Minalba is recognized as the highest quality brand in the segment and is at the top level of consumer preference due to the quality of its pure spring water. This is a competitive advantage that we will use to develop the brand. Our plan is to keep the bottling facility at its actual site at San Pedro de Los Altos, source of Minalba, the only natural spring water in Venezuela."
Founded in 1949, Mavesa's sales and distribution system services more than 50,000 stores throughout Venezuela, representing 90 percent of all domestic stores that sell consumer food and cleaning products. Marketed under the Mavesa, Las Llaves, La Torre del Oro, Nelly, Rikesa, Yukery, Pampero, and Toddy names, among others, the company's products hold leading shares in Venezuelan take-home markets. Mavesa employed 2,906 people at the end of April 2000. The company's ordinary shares are listed on the Caracas Stock Exchange, and its American Depositary Receipts, at a ratio of 60 ordinary shares per ADR, are traded on the New York Stock Exchange.
Empresas Polar is the largest privately-held industrial consumer product company in Venezuela, as well as, an important participant in other countries in Latin America. Is the leader, among others, in beer, soft drinks, corn flour, edible oil, rice, ice cream and snacks markets. Its investment portfolio is supported by important alliances with prestigious local and international firms in the areas of manufacturing, finance, distribution, oil and petrochemicals.
Pepsi-Cola Venezuela, C.A. is a joint venture between Empresas Polar and PepsiCo., since 1996, produces and distributes leading soft drink brands such as Pepsi Cola, 7-Up, and Golden. Presently, the Company accounts for 40% of the cola market, reaching more than 180,000 clients nationwide. A network of 56 distribution facilities and over 1,400 sales routes are supplied by 4 bottling facilities equipped with state-of-the-art technology that are strategically located throughout the country. The Company employs over 3,000 people.
Statements contained in this press release that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities and Litigation Reform Act of 1995. In addition, words such as "believes," "anticipates," "expects" and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties, including the timely development and acceptance of new products, the impact of competitive products and pricing, changing market condition, the successful integration of acquisitions and the other risks detailed in the company's prospectus filed December 6, 1996, and its annual report on Form 20-F filed April 30, 2000, with the U.S. Securities and Exchange Commission. Actual results may differ materially from those projected. These forward-looking statements represent the company's judgment as of the date of this release. The company disclaims, however, any intent or obligation to update these forward-looking statements.
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