Slow and Steady Won the Race

A decade ago, the Coca-Cola Company designated several companies as Latin America's anchor bottlers. One was Mexico's Coca-Cola Femsa and the other was Panama-based Panamerican Beverages. The companies quickly became fierce competitors in the battle to become the region's most important bottler of Coke, but they pursued different paths. Panamco expanded through a series of regional acquisitions. Coke Femsa focused on dominating and tightly managing the Mexican market. By 2002, it seemed that Panamco had chosen the winning strategy. It bottled Coke and other beverages in eight countries and generated twice the revenue of Coke Femsa.

Yet in the end, Femsa's operational excellence won out over Panamco's size. Last May, the Mexican company completed its $3.65 billion acquisition of Panamco, making it the largest ever cross-border M&A transaction between two Latin American companies. The deal also required the largest acquisition financing package ever assembled in Latin...