Pepsi-Gemex deal confirmed
Bottling Group has confirmed that a deal has been reached to buy
Mexico's main Pepsi products bottler.
Shares of Mexico's Pepsi-Gemex rose sharply on after US-based Pepsi Bottling Group has confirmed that a deal has been reached to buy Mexico's main Pepsi products bottler.
Pepsi-Gemex's American Depositary Receipts (ADRs) were up 3.67 per cent to $10.18 (€10.41) and its local shares traded on the Mexican bourse rose 5.72 per cent.
Pepsi Bottling, after weeks of due diligence of the Mexican firm's operations, said both parties agreed that the value of outstanding shares of Pepsi-Gemex was 11.612 billion pesos, or around €1.188 billion.
Shares of Pepsi-Gemex were still trading below the offer price, given the deal is still subject to approval by the US Securities and Exchange Commission (SEC) and the board of directors of PepsiCo, which owns 35 per cent of Pepsi-Gemex.
Enrique Molina, the current chairman of Pepsi-Gemex, holds a 43 per cent stake in the company. The remaining 22 per cent is in the hands of investors.
Pepsi Bottling, the world's biggest maker, seller and distributor of Pepsi-Cola beverages, is expected to move quickly to tender for all outstanding shares of Pepsi-Gemex once the SEC and PepsiCo approve the deal.
Analysts see Pepsi Bottling quickly bidding to win market share from Coca-Cola bottlers in Mexico, the second biggest soft drinks market in the world after the United States. Pepsi bottlers command a 19 per cent market share while bottlers of Coca-Cola beverages have more than 70 per cent.
Pepsi Bottling, based in Somers, New York, won clearance last week from Mexican regulators to take over Pepsi-Gemex.
