MEXICO: Coca-Cola FEMSA to acquire Grupo Fomento Queretano drinks unit
Coca-Cola FEMSA to buy Grupo Fomento Queretano via merger deal
Coca-Cola FEMSA has announced its third acquisition within six months after signing a deal to buy the drinks unit of fellow Mexican group Grupo Fomento Queretano.
Coca-Cola FEMSA said today (15 December) that it will acquire Fomento Queretano's beverage business via a merger deal worth MXN6.6bn (US$478m). The price includes MXN1.2bn of Queretano's debt.
The move follows Coca-Cola FEMSA's acquisition of Grupo Cimsa for MXN11bn, completed last week, and the merger deal with Grupo Tampico, which closed in October. For the past couple of years, the Coca-Cola drinks bottler has openly sought acquisitions, but analysts believe that the search was made more pressing earlier this year by a merger between rival firms Embotelladoras Arca and Grupo Continental.
Today, Coca-Cola FEMSA's CEO, Carlos Salazar Lomelin said: "The three mergers that we have announced this year will add to our Mexican operations more than 425m unit cases of beverages and more than MXN12bn in revenues, representing approximately a 30% increase for our Mexican operations’ volumes and revenues."
Coca-Cola FEMSA's chairman, José Antonio Fernández Carbajal, said of the company's deals in 2011: "The aggregate value of these transactions is more than MXN28bn, which represents a record investment for our company since the acquisition of Panamco in 2003.”
Queretano’s beverage division operates mainly in the state of Queretaro, as well as in parts of Hidalgo and Guanajuato. It has two bottling facilities and nine distribution depots. In 2011, it is expected to generate net sales of MXN3bn and EBITDA of MXN683m.
Under the terms of the deal, Coca-Cola FEMSA said that it will hand 45.1m newly-issued shares to family-owned Queretano, at MXN119.29 per share. As part of the merger, Coca-Cola FEMSA will also acquire a 12.92% stake in Mexican sugar group Promotora Industrial Azucarera.
The deal is subject to regulatory approval, as well as the backing of both companies' shareholders.
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