FEMSA Using Colombia as M&A Springboard

Mexico-based FEMSA, the major regional beverage firm, is on the acquisition trail, potentially beyond LatAm. The firm is establishing a small beachhead in Colombia this year of 20-30 stores, a strategy it will fine tune over the next 1-2 years, FEMSA CFO Javier Gerardo Astaburuaga Sanjinés tells LatinFinance. FEMSA is using the foray to prove its retail model can be used outside Mexico, with an eye to eventually expanding outside LatAm, adds Astaburuaga, who is also vice-president for strategic development. The firm has very low leverage, at close to 1x net debt to Ebitda. Astaburuaga concedes that there may be some inefficiencies associated with such ratios, but he sees strategic value in being flexible and able to pounce on any attractive purchase when it arises. “In the case that we acquire something outside Latin America . . . we will look at local markets,” says Astaburuaga, speaking of the financing strategy. He adds that Europe and Asia are potential locations for expansion.