Beverages giant The Coca-Cola Co. (KO) and its franchise bottler Coca-Cola FEMSA, S.A.B. de C.V. (KOF) on Friday announced a definitive agreement for Coca-Cola FEMSA to acquire 51 percent of Coca-Cola Bottlers Philippines, Inc. or CCBPI for $688.5 million in an all-cash transaction.
Coca-Cola FEMSA had said in February that it has entered into a 12 month exclusivity agreement with Coca-Cola Co. to evaluate the potential acquisition of a controlling ownership stake in the bottling operations owned by Coca-Cola Co. in the Philippines.
The purchase price represents an enterprise value of $1.350 billion for 100 percent of the bottler, leading to a projected EBITDA multiple of around 13.5 times in 2012.
Coca-Cola FEMSA will have an option to acquire the remaining 49 percent of CCBPI any time during the seven years, following the closing of the deal. It will have a put option to sell its ownership to The Coca-Cola Co. any time during year six. The transaction is expected to close early next year.
The CCBPI has 23 production plants, serving close to 800,000 customers and expects to sell 530 million unit cases of beverages in 2012. Coca-Cola has been present in the Philippines since the beginning of the 20th century and has been locally produced since 1912.
The Philippines received the first Coca-Cola bottling and distribution franchise in Asia. The Philippines has one of the highest per capita consumption rates of Coca-Cola products in the region. The deal will expand Coca-Cola FEMSA's bottling footprint beyond Latin America.
Allen & Company LLC. and Rothschild acted as financial advisors and Cleary, Gottlieb, Steen & Hamilton and SyCip Salazar Hernandez & Gatmaitan acted as legal advisors to Coca-Cola FEMSA on the deal.
José Antonio Fernández Carbajal, Chairman of Coca-Cola FEMSA, said, "We see profitable growth prospects and long-term returns in emerging market economies...Our principles and values share a common ground with the Filipino community and we are certain that together we can extend FEMSA's long-lasting commitment to the continuous creation of economic, social and environmental value in every community where we operate."
KO settled down 0.1 percent at $37.60 on Thursday. KOF dropped 0.2 percent to close at $144.93.
by RTT Staff Writer
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