Grupo Yoli, a Coca-Cola bottler with presence in Mexico, has agreed to merge its operations with Coca-Cola FEMSA (KOF), one of the largest public bottlers of Coca-Cola products in the world.
The transaction, the value of which is estimated at MXN8.81bn ($700m), has obtained the consent from the boards of directors of the two companies, and now awaits the approval of their respective shareholders.
The merger is also subject to customary regulatory and corporate approvals, and the completion of confirmatory legal, financial, and operating due diligence, including the approval of The Coca-Cola Company and the Comisión Federal de Competencia, the Mexican antitrust authority.
Post-transaction, Grupo Yoli is expected to get about 42.4 million newly issued KOF series L shares, valued at Ps.184.0 per share, while Coca-Cola FEMSA is likely to have Ps.1,009 million in net debt.
Coca-Cola FEMSA chief executive officer Carlos Salazar Lomelin believed the merger would allow both companies to leverage on the geographic proximity of their adjoining territories and the consumer appeal of their integrated multi-category portfolio of beverages.
"This transaction underscores our commitment to continue expanding within Latin America. Moreover, our advisory board will gain from the considerable experience and expertise of Grupo Yoli’s shareholders," said Lomelin.
The shareholders of Grupo Yoli said that they are pleased to merge their operations with Coca-Cola FEMSA.
"In addition to our shared values, we are certain that, together, we can combine the best practices and talent that we have developed at Grupo Yoli with the expertise and track record of Coca- Cola FEMSA to solidify our merged company’s market leadership and create value for all of our stakeholders," shareholders added.
Grupo Yoli, which posted sales of about 99 million unit cases of beverages in Mexico during 2012, has its core operations in the states of Guerrero and Oaxaca.