Mexican retail giant and Coca-Cola bottler Femsa unveiled on Tuesday, July 5th, a 1.1 billion Swiss franc ($1.15 billion USD) cash takeover of Swiss kiosk operator Valora, part of the Mexican company’s plans to expand into a potentially lucrative European market.
Femsa shares fell after the announcement on concerns it may pay too much.
The takeover offer, which Valora’s board and its largest shareholder also back, is the first major acquisition outside of Latin America for Femsa, formally known as Fomento Economico Mexicano.
Femsa, whose Oxxo convenience stores are ubiquitous in Mexico, controls Coca-Cola Femsa, the world’s top Coca-Cola bottler, and is also the No. 2 shareholder in Dutch brewery Heineken.
Femsa Chief Executive Officer Daniel Rodriguez said in a Tuesday conference call that the company sees Valora as “an entrance gate to Europe.”
The Femsa offer includes plans to speed up growth in Switzerland, Germany, and other European countries where Valora operates, Valora said in a statement.
That could include both organic growth and acquisitions, Rodriguez said.
“We see that there could be more acquisitions that we could implement going forward,” using the Swiss retailer as a base, he added.
Femsa, which had total sales of more than $27 billion last year, made an offer of 260.00 francs per Valora share, a 52% premium compared to the Swiss firm’s last closing price, Valora said.
Valora noted that its board recommended that shareholders accept the offer. Ernst Peter Ditsch, Valora’s largest shareholder with a nearly 17% stake, backs the deal.
Valora stock traded 50% higher at 256.50 Swiss francs per share shortly after the market opened on Tuesday and shot up 51% in late morning trading. But Femsa shares were down more than 5.4%.
Source: El Financiero