MEXICO – Coca-Cola FEMSA, the world’s largest Coca-Cola franchise bottler by sales volume, has announced plans to invest US$13.91 billion over the next five years to enhance operations and deliver increased shareholder value.
The South American bottler highlighted that a significant portion of this investment, US$9.97 billion, will be dedicated to its operations in Mexico, where it employs around 280,000 individuals.
The strategic focus on returning value to shareholders comes on the heels of various disinvestments in recent years. FEMSA emphasized its commitment to driving long-term intrinsic value per share through a capital allocation strategy.
In a filing, the company stated, “Considering the remarkable speed and success with which the FEMSA forward-related divestments have been executed, and after accounting for our expected organic and inorganic capital needs, we believe that returning capital to shareholders should be an important part of the overall strategy.”
As part of this capital return initiative, FEMSA aims to give back approximately 6 percent of the group’s current public market value to shareholders over the next two to three years. This will be achieved through a combination of share buybacks and dividend payouts.
Last year, FEMSA undertook a significant disinvestment by selling US$3.8 billion in shares jointly owned in Heineken Holding and Heineken NV.
This move followed an internal strategic review that led to the decision to divest its stakes in Heineken Holding and Heineken NV, with a renewed focus on core business verticals like its South American retail units OXXO and Coca-Cola bottling operation Coca-Cola FEMSA.
Coca-Cola FEMSA, boasting a portfolio of 134 brands, operates 56 manufacturing plants and 249 distribution centers across its vast network.
İçecek to acquire CCBB
Concurrently, Coca-Cola İçecek, a Turkish beverage company, along with its subsidiary CCI International Holland, is set to fully acquire Coca-Cola Bangladesh Beverages (CCBB) for US$130 million.
The acquisition will be financed using the existing cash resources of CCI International Holland, with expectations of having a “modest impact” on Coca-Cola İçecek’s net leverage.
Karim Yahi, CEO of CCI, expressed enthusiasm about the acquisition, stating, “We are very pleased to sign the share purchase agreement to acquire CCBB, which we see as a great opportunity to enter a market with significant future potential, where growth and value can be generated by deploying CCI’s core capabilities.” Yahi added,
“This acquisition also creates a more diverse geographical footprint for CCI and solidifies its alignment with The Coca-Cola Company.”
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