Banking & Business

Feb 1, 2003

Femsa Gulps Down Panamco

Femsa Gulps Down Panamco Mexican soft drink company Coca-Cola Femsa in January swooped in to take control of Panamerican Beverages (Panamco), paying $3.6 billion for the company. Coca-Cola Femsa is putting down $2.72 billion in cash and stock, and assuming a further $880 million in debt. Panamco is the largest soft drink maker in Latin America. The acquisition will create the world's second-largest bottler of Coca-Cola, Fanta and Sprite soft drinks. Femsa expects the merged group to post annual revenues of $4.6 billion. Coca-Cola Femsa will pay $22 a share to owners of Panamco's Class A shares and $38 a share to Class B shareholders. Venezuela's Cisneros Group owns 8.98% of Panamco's B shares. After the deal was announced, the price of Panamco's Class A shares, which trade on the New York Stock Exchange, doubled to more than $20. However, Coca-Cola Femsa's stock price dropped 15%...

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