Embotelladora Andina to absorb Coca-Cola Polar

Embotelladora Andina to absorb Coca-Cola Polar

Embotelladora Andina is looking to merge its operations with rival Embotelladoras Coca-Cola Polar.

Chile-based Andina is set to take around an 80% stake of the merged business, according to a preliminary agreement signed by the two bottlers. The move signals a growing trend for consolidation among soft drinks bottlers in Latin America.

The deal, which is set to complete by 15 March, will see Andina issue shares at around 0.3 times the value of each Coca-Cola Polar share. Prior to completing the deal, both companies plan to issue dividends to their own shareholders. Andina will hand out CLP28.1bn (US$58.6m) and Coca-Cola Polar will distribute CLP29.6bn among shareholders. 

Consolidation is emerging as a key feature of Latin America's soft drinks bottling sector. In the last year, Coca-Cola FEMSA has agreed deals to acquire three Mexican rivals, Grupo Tampico, Grupo CIMSA and Grupo Fomento Queretano, while Embotelladoras Arca and Grupo Continental have also merged operations. Some analysts have touted Andina as a potential target for Coca-Cola FEMSA.

A merger between Andina and Coca-Cola Polar is set to create one of Latin America's largest bottlers, with operations across Argentina, Brazil, Chile and Paraguay. The merged entity would have annual volume sales of 641m unit cases and US$2.56bn in net sales.   

For the merger announcement, click here.