Coca-Cola FEMSA Reaches an Agreement to Acquire Vonpar in Brazil

Coca-Cola FEMSA, the largest public bottler of Coca-Cola products in the world by sales volume, announces that its Brazilian subsidiary, Spal Industria Brasileira de Bebidas S.A.(Spal), has reached an agreement with the shareholders of Vonpar to acquire 100% of Vonpar, one of the largest privately owned bottlers in the Brazilian Coca-Cola system, for an aggregate enterprise value of R$3,578 million and an approximate equity value of R$3,508 million (which is subject to confirmation on debt, cash and other customary adjustments between signing and closing). During the last twelve months ended June 30, 2016, Vonpar sold 190 million unit cases of beverages, including 23 million unit cases of beer, generating R$2,026 million in net revenues and an EBITDA of R$335 million.

The preliminary estimated amount of savings to be captured from this transaction in the next 18 to 24 months is approximately R$65 million at the EBITDA level. These cost-cutting will result from reconfiguration of the logistic network, restructiring of manufacturing, cost-cutting in administrative expenses and the implementation of Coca-Cola FEMSA’s commercial practices.

This franchise operates in the states of Rio Grande do Sul and Santa Catarina with 3 bottling facilities and 5 distribution centers and has close to 4,000 employees serving more than 15 million consumers. The combined territories will allow Coca-Cola FEMSA to serve approximately 88 million consumers — 43% of the population in Brazil and 54% of its GDP.

This transaction will increase Coca-Cola FEMSA's volume in Brazil by 25%, allowing the company to reach 49% of the Coca-Cola system’s volume in the country.

Coca-Cola FEMSA will seek the approval of The Coca-Cola Company for this acquisition.

The IUF will closely monitor the impact on employment that the savings from this transaction will cause together with its affiliates organized at Coca-Cola operations in Brazil.


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