Pepsi buys Mexican bottler
could allow it to buy Mexican Pepsi-Cola bottler Pepsi-Gemex.
Pepsi Bottling Group has announced a non-binding agreement that could allow it to buy Mexican Pepsi-Cola bottler Pepsi-Gemex.
Pepsi-Gemex, the second largest bottler of Pepsi-Cola outside the United States and owner of Mexico's largest purified water company, Electropura, has a gross enterprise value of Mexican Pesos 11.9 Mexican Pesos (€1.39 billion), as determined by both sides.
Pepsi Bottling said it will value the outstanding shares of Pepsi-Gemex at the gross enterprise value reduced by the company's expected net debt level including any declared but unpaid dividends.
Somers, New York-based Pepsi Bottling said the deal would involve its possible acquisition of all outstanding shares of the Mexico City-based company from its two principal shareholders.
Separately, Pepsi-Cola maker PepsiCo said it supported the potential acquisition. "We believe an acquisition of Pepsi-Gemex by The Pepsi Bottling Group would be a very positive development and strengthen the long-term growth prospects of Pepsi-Cola in Mexico," said Peter Thompson, chief executive of PepsiCo Beverages International.
Analysts said the deal would help Pepsi-Cola advance in the Mexican market, the world's second largest per-capita consumer of soft drinks after the United States.
Jose Antonio Martinez, an analyst with Interacciones Casa de Bolsa in Mexico City, called the move an "efficient and optimum" way for Pepsi to gain Mexican market share.
Pepsi Gemex has been Mexico's main bottler of Pepsi products since 1995, when it began acquiring and consolidating smaller bottlers across the country.
Pepsi has about a 19 per cent share of the Mexican soft drink market, compared with about 80 per cent for Coca-Cola.