Coca-Cola to Acquire Jugos del Valle
Jugos del Valle is the second largest producer of packaged juices, nectars and fruit flavored beverages in Mexico, the largest producer in Brazil, and has presence in other Latin American markets.
20/12/06 Coca-Cola FEMSA, S.A.B. de C.V. and The Coca-Cola Company have announced an agreement with the controlling shareholders of Jugos del Valle, S.A.B. de C.V. to conduct a public tender offer in Mexico of up to 100% of the outstanding public shares of Jugos del Valle for approximately US$380 million in cash. The price assumes a total aggregate value of US$470 millon and that Jugos del Valle has approximately US$90 million in net debt. The final price to be paid will be based on the actual level of debt, net working capital and other liabilities on the date the tender offer is launched. The tender offer will be launched once regulatory approvals have been obtained.
The transaction will increase greatly the Coca-Cola system's presence in the fast-growing non-carbonated beverage segment in Latin America, and offers the potential for significant synergies. Jugos del Valle is the second largest producer of packaged juices, nectars and fruit flavored beverages in Mexico, the largest producer in Brazil, and has presence in other Latin American markets. Jugos del Valle generated approximately US$440 million in total revenues for the 12-month period ended September 30, 2006.
Coca-Cola FEMSA and The Coca-Cola Company plan to create a new jointly owned entity to acquire the Jugos del Valle shares. Both parties anticipate inviting, as soon as possible after completing the acquisition, the rest of the Coca-Cola bottler system in Mexico to participate in the Mexican operations of this joint venture, and the rest of the Coca-Cola bottler system in Brazil to participate in the Brazilian operations. Such participation would be under the same basic terms and conditions pursuant to which Coca-Cola FEMSA and The Coca-Cola Company have agreed to the transaction.
"This joint venture represents a formidable platform to further develop our non-carbonated business in a segment that is growing three times faster than other non-alcoholic beverages. Working together with The Coca-Cola Company and the rest of the Coca-Cola bottling system in Mexico and Brazil, we are unlocking new value-creation opportunities and developing a competitive portfolio of beverages," stated Carlos Salázar, chief executive officer of Coca-Cola FEMSA.
José Octavio Reyes, president of The Coca-Cola Company Latin America added, "As agreed with Coca-Cola FEMSA, this new acquisition will be integrated into a go-to-market strategy that will benefit our bottlers in the regions where Jugos del Valle is present. By working with our bottlers, we intend to maximize the growth value of the acquisition."
