MONTERREY, México--(BUSINESS WIRE)--Embotelladoras Arca, S.A.B. de C.V. ("Arca") (BMV:ARCA*), and Grupo Continental S.A.B. ("Contal") (BMV:CONTAL*) jointly announced that the majority shareholders of both companies have reached a binding merger agreement. The transaction has been approved by the Board of Directors of both Arca and Contal. The agreement is subject to customary corporate and regulatory approvals, including final approval from The Coca-Cola Company and Mexico’s antitrust authority, the Comision Federal de Competencia. Final closing of the transaction is expected to take place during the second quarter of 2011.
The merger will be carried out through an exchange of newly issued Arca shares for Contal shares, at an exchange ratio of 0.625 Arca shares per Contal share. As a result, Arca will issue 468,750,000 new shares. Shares of the new company will be traded on the Mexican Stock Exchange under a new ticker symbol to be determined at a later date. The aforementioned exchange ratio was agreed upon using a merger of equals basis.
In the region’s largest bottling transaction in recent years, the operations of both entities will be integrated under a single company. The company will be named Arca Continental, with estimated sales of 1.2 billion unit cases, thereby positioned as the second largest bottler in Latin America.
Cynthia Grossman, Chairman of the Board of Grupo Continental, S.A.B. stated, “With this transaction, we will optimize the strengths and capabilities of both companies and more effectively capture the opportunities presented by the constantly-evolving marketplace we serve. This is an ideal platform to begin a new period of development and integration within The Coca-Cola system, focusing our efforts in continuing to provide excellence in every aspect of our service to the market, in order to assure and sustain the preference and loyalty of our clients and customers”
Manuel L. Barragán Morales, Arca’s Chairman of the Board, stated, “The integration of both companies opens the door to a wide range of value creation opportunities and strengthens our position as one of the leading beverage companies in the region”. He added, “We appreciate the support and confidence of The Coca-Cola Company and reiterate our commitment to jointly preserve the leadership of its products and brands throughout our markets.”
Arca and Contal believe this merger will strengthen their leading position in the beverage market by leveraging their brand portfolio and generating numerous opportunities to better serve their customers and consumers. The combined human expertise and best practices will lead to significant synergies, thereby adding incremental value to shareholders of both companies.
Estructura Partners acted as exclusive financial advisor on behalf of Arca, and HSBC on behalf of Contal.
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ARCA-CONTAL MERGER CONFERENCE CALL & WEBCAST |
| There will be a special conference call with simultaneous webcast presentation to discuss this transaction. |
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Presenters: |
| Francisco Garza Egloff, Chief Executive Officer of Embotelladoras Arca and |
| Miguel Angel Rábago Vite, Chief Executive Officer of Grupo Continental |
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Date: Tuesday, January 25, 2011 |
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Time: 11:30am Eastern Time; 10:30am Mexico City/Monterrey Time |
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To access the conference call, please dial: |
| 1-800-311-9401 (toll free from within the U.S.) |
| +0018003681029 (toll free from within Mexico) |
| +1-334-323-7224 (all other participants) |
| Passcode: 36151 |
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To access the simultaneous webcast presentation, go to: |
About Arca
Arca produces, distributes and sells beverages under The Coca-Cola Company brand. Arca was formed in 2001 through the merger of three of the oldest bottlers in Mexico, making it the second-largest bottler in Latin America. The Company, headquartered in Monterrey, Nuevo León, serves the northern region of Mexico, as well as Ecuador and Northern Argentina. Arca also produces and distributes Bokados brand snack foods. For more information, visit www.e-arca.com.mx
About Grupo Continental
Grupo Continental is the 13th largest Coca-Cola bottling group worldwide. The Company started operations in 1964 and now serves over 14.5% of Mexican territory, including the States of Coahuila, Durango, Zacatecas, Aguascalientes, San Luis Potosí, Jalisco, and Colima. Its headquarters are located in Tampico, Tamaulipas. For more information, visit www.contal.com