Fitch: KOF's Agreement to Acquire AdeS Aligned With Growth Strategy

MONTERREY, Mexico--(BUSINESS WIRE)-- Coca-Cola FEMSA, S.A.B. de C.V. (KOF) together with The Coca-Cola Company's (KO) announcement that it has entered into an agreement to acquire Unilever's AdeS soy-based beverage business is aligned with their strategy of growing in categories that are complementary to the soft drinks business, according to Fitch Ratings.

Fitch believes the AdeS brand will improve the diversification of KOF's still beverage portfolio, which accounts for 6% of total volumes for the las 12 months as of March 31, 2016. AdeS will also bring additional growth opportunities as the brand is incorporated into KOF's extensive distribution network, increasing products penetration.

In addition, Fitch does not expect any rating implications as the total amount of the acquisition, USD575 million, will be equally funded by both companies (KOF and KO). Fitch recognizes that other bottlers within the Coca-Cola system can participate in the equity of AdeS, which has been the case with other still beverage acquisitions. The transaction has been approved by the Boards of Directors of KOF and KO and will be subject to regulatory approvals and customary closing conditions.

AdeS is a leading soy-based beverages brand with operations in Brazil, Mexico, Argentina, Uruguay, Paraguay, Bolivia, Chile, and Colombia. During 2015, AdeS sold 56.2 million unit cases of beverages and generated net revenues of USD284 million.

Additional information is available on www.fitchratings.com.

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Fitch Ratings
Primary Analyst
Rogelio Gonzalez
Director
+52 8399 9100
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612
Monterrey, N.L., Mexico
or
Johnny Da Silva
Director
+1-212-908-0367
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: [email protected]

Source: Fitch Ratings

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