Bloomberg News

Coca-Cola Femsa Sees 2.7 Billion Pesos in Ebitda From 3 Mergers

December 16, 2011

Dec. 15 (Bloomberg) -- Coca-Cola Femsa SAB, Latin America’s largest Coke bottler, sees as much as 2.7 billion pesos ($193.8 million) in cash flow from three acquisitions announced this year, Chief Financial Officer Hector Trevino said.

“The sum of the three Mexican companies will represent about 2.5 billion to 2.7 billion pesos in Ebitda in addition to what Coca-Cola Femsa used to generate before these mergers,” Trevino said in a telephone interview today from Queretaro, Mexico. Earnings before interest, taxes, depreciation and amortization is a measure of cash flow known as Ebitda.

Coca-Cola Femsa bought the beverage division of Mexico’s Grupo Fomento Queretano for 6.6 billion pesos ($474 million) and will pay for the acquisition by issuing new shares, according to a statement to regulators today. 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.

The Queretano purchase should be completed by the first quarter of next year, Trevino said.

Trevino said he’s open to seeking out additional mergers or acquisitions in Mexico and elsewhere in Latin America to foster growth.

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.

--Editors: Brendan Walsh, Glenn J. Kalinoski

To contact the reporters on this story: Jose Enrique Arrioja in Mexico City at jarrioja@bloomberg.net; Thomas Black in Dallas at tblack@bloomberg.net

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


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