Background on FEMSA and the Heineken Transaction
In January 2010, FEMSA, a prominent Mexican beverage company based in Monterrey, sold Cervecería Cuauhtemoc Moctezuma to the Dutch brewing giant, Heineken. As part of this $7.6 billion deal, FEMSA received 20% of Heineken’s shares, which it gradually sold over time.
Who is FEMSA?
FEMSA, or Grupo Fomento Económico, S.A.B. de C.V., is a Mexican multinational company that operates in the beverage, retail, and real estate industries. Established in 1890, FEMSA has grown to become one of Mexico’s largest corporations. Its portfolio includes brands like Coca-Cola FEMSA, OXXO (the largest convenience store chain in Latin America), and FEMSA Salud.
Why is this transaction significant?
This transaction was one of the largest in Mexico’s brewing industry, allowing FEMSA to diversify its investments and focus on other businesses like OXXO, Coca-Cola FEMSA, and strategic ventures. Meanwhile, Heineken strengthened its position in the Mexican market and expanded its presence across Latin America.
Details of the Recent Share Sale
According to analysts, FEMSA recently sold 5.2 million Heineken shares at a price of approximately 68.70 euros (around 77.32 USD) per share, potentially raising nearly 400 million USD for the company.
Bloomberg reported that the sale, organized by Barclays and Morgan Stanley, resulted in a 3% discount compared to the closing price on May 19. Consequently, Heineken Holding’s stock fell in early trading, with the largest shareholder experiencing a 3.6% drop, marking a 12.5% decline over the past year.
Impact on FEMSA and Heineken
This share sale enables FEMSA to reallocate resources towards its diverse business segments, including OXXO, Proximidad y Salud (comprising Valora, FEMSA Salud, and OXXO Gas), Coca-Cola FEMSA, and strategic ventures. Meanwhile, Heineken solidifies its market position in Mexico and Latin America.
Key Questions and Answers
- Who is FEMSA? FEMSA, or Grupo Fomento Económico, S.A.B. de C.V., is a Mexican multinational company with interests in beverages, retail, and real estate.
- What was the significance of FEMSA’s 2010 sale to Heineken? The deal allowed FEMSA to diversify its investments and focus on other businesses, while Heineken strengthened its market position in Mexico and Latin America.
- What is the recent share sale about? FEMSA sold 5.2 million Heineken shares, potentially raising nearly $400 million for the company.
- How did this sale affect Heineken’s stock? Heineken Holding’s stock fell by approximately 3% in early trading following the sale.
