Coca-Cola, Femsa say Mexico blocks jugos purchase
Coca-Cola Co., the world's largest soft-drink maker, and its Mexican bottler said Mexico's antitrust agency ruled against the $380 million acquisition of a juice maker.
Coca-Cola and Coca-Cola Femsa SA said today in a statement they were unofficially informed of the Federal Competition Commission's decision to block the purchase of Mexico's Jugos del Valle SAB for $380 million in cash and the assumption of $90 million debt. The agreement was announced in December.
The acquisition was designed to increase Atlanta-based Coca-Cola's sales of non-carbonated beverages in Latin America by forming a joint-venture company with its bottlers in Mexico and Brazil. Coca-Cola and Coca-Cola Femsa said they will review the antitrust decision once it's made official and may appeal.
``We haven't gotten any formal notification outlining any reasons or anything,'' Coca-Cola spokesman Dana Bolden said from Atlanta.
Jugos del Valle had sales of $440 million for the 12 months ending in September, mostly in Mexico and Brazil.
The two companies required the regulator's approval before holding a public offer for Jugos del Valle's shares. Coca-Cola owns 32 percent of Coca-Cola Femsa, a unit of Fomento Economico Mexicano SA, Latin America's largest beverage company.
Partnership Stakes
Coca-Cola Femsa had started talks to sell part of its planned 50 percent stake in Jugos del Valle to other Coca-Cola bottlers to form a juice partnership, Coca-Cola Femsa Chief Executive Officer Jose Antonio Fernandez said in March.
Coca-Cola Femsa, Latin America's largest soft-drink bottler, would have managed the partnership, he said.
Shares of Coca-Cola rose 71 cents, or 1.4 percent, to $51.95 as of 11:56 a.m. New York time. Fomento Economico's shares trading in New York rose $1.05 to $116.09.
Coca-Cola separately today announced an agreement to buy the maker of Glaceau Vitaminwater for $4.1 billion.
(Published by Bloomberg, May 25, 2007)