Bloomberg News

Coca-Cola Femsa Pays $478 Million in Third 2011 Acquisition

December 16, 2011

(Updates to add previous acquisitions in sixth paragraph.)

Dec. 15 (Bloomberg) -- Coca-Cola Femsa SAB made its third acquisition this year as it widens its lead as Latin America’s largest Coke bottler.

Coca-Cola Femsa bought the beverage division of Mexico’s Grupo Fomento Queretano for 6.6 billion pesos ($478 million) and will pay for the acquisition by issuing new shares, according to a statement to regulators today. Queretano’s beverage unit, which may generate net revenue of about 3 billion pesos this year, operates two bottling facilities and serves clients mainly in the central state of Queretaro, according to the statement.

Coca-Cola Femsa has announced plans for acquisitions of smaller rivals totaling 27.1 billion pesos this year, according to data compiled by Bloomberg. The purchases will add about 12 billion pesos in annual revenue, according to Coca-Cola Femsa’s filing today.

Coca-Cola Femsa shares rose 1.1 percent to 121.33 pesos at 10:53 a.m. in Mexico City. They have gained 19 percent this year.

Earlier this week, Coca-Cola Femsa said its shareholders approved an agreement to buy the bottling operations of Mexico’s Grupo Cimsa with new shares, a transaction announced in September.

In June, Coca-Cola Femsa agreed to pay 6.55 billion pesos in stock for the Coke bottling operations of Grupo Tampico SA, marking the company’s first all-share transaction.

Milk Producer

Coca-Cola Femsa has also expanded beyond the carbonated beverages business. On March 28, the company completed the purchase of Grupo Industrias Lacteas, a Panama milk producer, for an undisclosed amount. The milk company had 2010 sales of $140.9 million, Coca-Cola Femsa said at the time.

The acquisitions follow the 27.7 billion peso merger of Mexico’s second- and third-largest bottlers this year to form Arca Continental SAB.

Coca-Cola Femsa reported a 7.1 percent increase in third- quarter profit as sales volumes increased in Mexico, Colombia and Argentina. Net income rose to 2.28 billion pesos as revenue climbed 17 percent to 30.3 billion pesos.

--With assistance from Thomas Black in Dallas. Editors: Brendan Walsh, Glenn J. Kalinoski

To contact the reporters on this story: Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net; Jose Enrique Arrioja in Mexico City at jarrioja@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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