FEMSA Board approves Coca-Cola Company (NYSE:KO) deal, PepsiCo, Inc (NYSE:PEP)
The Coca-Cola Company’s (NYSE:KO) franchisee has been taken by The Coca-Cola FEMSA S.A.B de C.V. who have agreed to purchase 100% stock of the Brazilian peer named Companhia Fluminense de Refrigerantes for $448 million to be paid in cash. The deal has been approved by the FEMSA’s Board but is subjected to the approval of Brazilian Antitrust Authority and the Coca-Cola Company.
Coca Cola FEMSA is co-owned by two companies namely The Coca-Cola Company and Fomento Economico Mexicano S.A. (FEMSA). Companhia Fluminense is engaged in producing and distributing trademark beverages of the Coca-Cola Company which includes Coca-Cola, Fanta, Del Valle etc in the regions of Brazil. The deal of acquiring Companhia will extend Coca-FEMSA’s reach in Latin America which is currently emerging as a business hub. This will also help in strengthening its expansion in Brazilian markets. Brazil is expected to lead a growth trajectory and the scheduled FIFA World Cup in 2014 and Olympics in 2016 will help the company to generate huge cash and capture the Brazilian market.
Coca-Cola FEMSA is on a pace to acquire several related business. It had acquired Coke bottlers in Mexico two years ago, recently in January 2013; the company has acquired 51% shares of the Coca-Cola Bottlers Philippines, Inc and has entered into a definite agreement to acquire Coca-Cola Grupo Yoli, S.A. de C.V. another Mexican based company for $700 million.
PepsiCo, Inc (NYSE:PEP) another leading company for manufacturing food and beverages has a market capture across the world. The company since six years under the leadership of their CEO has rewarded their shareholders with consistent financial and operational performance. The company easily and quickly address to the change in the dynamics of the market. The hazardous effects of the soft drink and the general public being aware of the fact have made the company to invest in diversified portfolio of other products too. PepsiCo finds Coca-Cola one of its major competitors in the market.