Coca-Cola Femsa’s M&A Duel With Arca Seen Moving Ahead to Chile
Mexico’s Coca-Cola Femsa SAB and Arca Continental SAB spent the last decade competing to buy up Coke bottlers across Latin America. Now they’re setting their sights on Chile.
That’s the natural last step after Arca bought 47.5 per cent of Corp. Lindley SA of Peru for $760 million, leaving Santiago-based Embotelladora Andina SA and Coca-Cola Embonor SA as the primary targets still in play, according to Credit Suisse Group AG and Corporativo GBM SAB.
After cutting deals from Mexico to Argentina, Coca-Cola Femsa and Arca have made it increasingly difficult for family-run bottlers to go it alone, especially with Coca-Cola Co., the world’s biggest beverage maker, encouraging mergers to boost efficiency. Over the past decade, Coca-Cola Femsa and Arca have snapped up about $10 billion in assets in Latin America -- a region that consumes more soft drinks than any other in the world.
Coca-Cola “is seeking to consolidate different regions, and that would imply that in the case of Andina and Embonor, they’d be acquired by other companies that are bigger,” said Tomas Sanhueza, an analyst at Credicorp Capital in Santiago. “I see a pressure on the part of Coca-Cola."
Andina declined to comment about its potential merger and acquisition strategy. Arca and Embonor didn’t respond to requests for comment.
“Coca-Cola Femsa is always looking for opportunities to grow through reaching its operations’ full potential,” the company said in an e-mailed response.
Bloomberg News, edited by ESM