Coca-Cola FEMSA, Grupo CIMSA to Merge
Coca-Cola FEMSA, S.A.B. de C.V., the largest public bottler of Coca-Cola products in the world in terms of sales volume, and Corporacin de los ngeles, S.A. de C.V. and its shareholders ("Grupo CIMSA") have agreed to merge their beverage businesses. Grupo CIMSA, a Mexican family-owned Coca-Cola bottler, operates mainly in the states of Morelos and Mexico, as well as in parts of the states of Guerrero and Michoacan. Grupo CIMSA's bottling operation is expected to sell 159 million unit cases of beverages in Mexico in 2011.
"We continue to move in the right direction. This merger with one of the largest franchises in the Mexican Coca-Cola bottling system confirms that our company represents an attractive, transparent and diversified investment vehicle for families that have been in the beverage industry for a long time. This new partnership will leverage the geographic fit of our contiguous territories, our shared best practices, and the strength of our combined multi-category portfolio of beverages. We feel honored to receive this vote of confidence from Grupo CIMSA's shareholders, and we remain committed to responsibly manage our business to continue growing together and to deliver increased value for all of our shareholders," says Carlos Salazar Lomelin, chief executive officer of the Coca-Cola FEMSA.
The merger agreement has been approved by Coca-Cola FEMSA's Board of Directors and is subject to the completion of confirmatory legal, financial, and operating due diligence and to customary regulatory and corporate approvals, among them the approval of The Coca-Cola Company and the Comisin Federal de Competencia, the Mexican antitrust authority. Both Coca-Cola FEMSA and Grupo CIMSA will call for an extraordinary shareholders meeting for the approval of this merger.
The aggregate enterprise value of this transaction is Ps. 11,000 million. In addition, through this transaction, Coca-Cola FEMSA will become the owner of a 13.2 percent stake in Promotora Industrial Azucarera, S.A. de C.V. ("PIASA"), a participant in the Mexican sugar industry.