Mexico's Coca-Cola Femsa to buy Brazilian Coke bottler Vonpar for $1.08 bn
26 September 2016
Mexican soft-drink bottler Coca-Cola Femsa SAB struck a deal to buy Brazilian Coke bottler Vonpar, for around 3.5 billion Brazilian reals ($1.08 billion), in order to expand in Latin America's biggest economy.
Coca-Cola Femsa, the world's largest public bottler of Coca-Cola products by volume, said that the acquisition will be carried out by its Brazilian unit Spal Industria Brasileira de Bebidas SA through a combination of $537 million in cash, $22 million in debt assumption, $214 million in new share issuance, and $339 million in a convertible promissory note issuance.
Femsa expects synergies of $20 million in the next 18-24 months through streamlining and reconfiguring logistics, manufacturing and administration.
The deal will be Femsa's third and biggest acquisition in Brazil in three years, after it acquired Spaipa and Fluminens.
Founded in 1948, Vonpar produces and distributes Laranjinha, a local brand of soft drinks in the state of Rio Grande do Sul. It started distributing Coca-Cola products in 1956 and currently operates 3 bottling facilities and 5 distribution centres, with close to 4,000 employees serving 15.4 million consumers.
Vonpar produces and distributes Coca-Cola, Fanta, Kuat, Del Valle, and other trademark beverages of The Coca-Cola Company in the states of Santa Catarina and Rio Grande do Sul.
The merger will give Femsa around 88 million consumers or 43 per cent of Brazil's population and 54 per cent of its GDP.
The transaction will increase Femsa's volume in Brazil by 25 per cent, allowing it to reach 49 per cent of the Coca-Cola system's volume in the country.
Femsa produces and distributes Coca-Cola, Fanta, Sprite, Del Valle, and other trademark beverages of the Coca-Cola Company in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Brazil, Argentina and Philippines, along with bottled water, juices, teas, isotonics, beer, and other beverages in some of these countries.
It has 63 bottling facilities and serves more than 358 million consumers through 2,800,000 retailers and has more than 100,000 employees worldwide.
"We are excited to continue consolidating our leadership position in Brazil. We are confident that Vonpar's talented group of professionals, and their track record of performance, coupled with their social and environmental commitment, will positively impact our combined operations going forward," said John Santa Maria, CEO of Femsa.