As part of a joint deal with Heineken and its partner in Latin America, Florida Ice and Farm Company (FIFCO), Panamco, the region's largest soft drinks bottler, is to take control of the Panamanian bottler, Coca-Cola de Panama (CCP). The companies announced that through the issue of 3.9m new shares in CCP, they have acquired direct control of CCP and indirect control of Baru, which is 52%-owned by CCP.

The three companies expect to complete the deal through public tender offers for the remaining shares of CCP and Baru. These tender offers will begin as soon as possible, the companies said, and, in accordance with Panamanian company law, will remain open for 30 days, unless extended. The deal is expected to be completed during the fourth quarter of 2002.

Once the transaction is completed, Panamco would own and operate CCP while Heineken and FIFCO will own and operate Baru. But CCP and Baru will continue to share finance, administration and warehousing services, the companies announced. The total deal is worth some $138m including assumed debt.

On completion of the tender offers, Panamco expects to control 100% of CCP which is the largest soft drinks bottler in Panama with an estimated 60% market share. The bottler sold around 18.9m unit cases in 2001, with sales revenues of $62.1m and cash operating profit of $9.2m.

The CCP element of the joint deal is estimated at around $73m which, stripping out the assumption of around $11.7m in debt, gives an equity value for CCP of around $61.3m.

"Panama marks an important and exciting acquisition for Panamco, and one which we expect to be accretive in its first full year of operation," said Panamco's CEO, Craig Jung. "Panama is contiguous to two existing Panamco territories - Costa Rica and Colombia - enabling operating synergies. We see an opportunity to improve margins to the levels of our other Central American franchises and value the fact that adding dollar-based profits through this acquisition lowers Panamco's overall country risk profile. Importantly, we look forward to exploring strategic opportunities with Heineken and FIFCO in other Central American countries where we have mutual interests or our operations overlap."