Coca Cola Femsa Expands In Brazil With Vonpar Acquisition
Zacks Investment Research | Sep 25, 2016 11:21PM ET
In an attempt to boost its presence in the emerging market of Brazil, Coca-Cola FEMSA S.A.B. de C.V.’s (NYSE:KO) Brazilian subsidiary Spal Industria Brasileira de Bebidas S.A. ("Spal"), has inked an agreement to completely acquire Vonpar. The takeover deal has an aggregate enterprise value of R$3,578 million ($1.11 billion) and an approximate equity value of R$3,508 million. The stock rallied almost 2% when the news was announced on Sep 23, 2016 on optimistic investor spirit.
Vonpar, the largest privately owned bottlers in the Brazilian Coca-Cola system has significant presence in the state of Paraná, in the south of Brazil, which perfectly complements Coca Cola Femsa’s operations in the region. The combined entity will allow Coca Cola Femsa, the largest Latin American bottler of The Coca Cola Company (NYSE:KO) to serve approximately 43% of the country’s population including the 15 million consumers whom Vonpar currently serves.
The takeover will also boost the total volume of bottles sold in Brazil by 25%. The takeover will also add three bottling facilities and five distribution centers employing 4,000 employees in the states of Rio Grande do Sul and Santa Catarina where Vonpar currently operates.
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