Coca-Cola FEMSA inks blockbuster Brazil deal for $1.86bn


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Coke FEMSA has strenghtened it's market-leading position in Brazil (Picture Credit: Haley Howard)
Coke FEMSA has strenghtened it's market-leading position in Brazil (Picture Credit: Haley Howard)

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Coca-Cola FEMSA has inked a deal to acquire Brazil’s second-largest privately owned Coke bottler in an eye-watering $1.86bn cash deal and says the deal is a ‘perfect geographic fit’

The Mexico-based company – the largest public bottler of Coca-Cola products in the world - said it was “privileged ​will take over Spaipa S.A Industrial Brasileira de Bebidas via the debt-financed deal.

This is now subject to approval from The Coca-Cola Company and the Brazilian anti-trust authority.

Coca-Cola FEMSA chair José Antonio Fernández Carbajal said his firm continued to strengthen its position within Coke’s Brazil system “while consistently increasing the profitability of this territory”.

Brazil regulation changes

The drinks firm has been hit by changes to Brazilian regulations – including a transportation law – and a weaker consumer environment in the country over recent quarters.

“Despire the challenges that exist in the short-term market conditions, our long-term view is consistent with the momentum that we have built up over a decade of operating in this country,”​ Carbajel said.

Carlos Salazar Lomelin, CEO, added: "We continue to create a robust platform in Brazil with the acquisition of the second largest privately owned bottler in the system, operating in one of the regions with the highest GDP per capita in the country,”

Perfect geographic fit

The firm said Spaipa's strategic footprint meant it was a “perfect geographic fit​” that linked Coca-Cola FEMSA's operations in the states of Mato Grosso do Sul and São Paulo.

The transaction will increase its Brazilian volumes by 40%, meaning it will account for 39% of Coca-Cola system volumes in the country.

In 2012 Spaina sold 236m unit cases of drinks and reported net revenue of $929m and EBITDA of $152m; its strongholds are São Paulo and Parana, and it has four bottling sites and 6000+ staff

Coca-Cola FEMSA hopes to achieve cost-saving synergies of around $33m at EBITDA level in the next 18-24 months by reconfiguring its logistic network, administrative and general efficiencies and introducing its own commercial practices.

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