Mexico's FEMSA focuses back on retail, bottling with Heineken stake sale (updated)
17/02/2023 18:51
(Updates with detail on FEMSA plans, divestment)
By Kylie Madry
MEXICO CITY, Feb 17 (Reuters) - Mexican retail and
bottling giant FEMSA FEMSAUBD.MX is focusing back on its core
businesses and digital operations, executives said Friday, after
the firm said it would divest its stake in Dutch beer giant
Heineken HEIN.AS .
FEMSA said overnight a bond and share offer of Heineken
Group would bring in around 3.2 billion euros ($3.4 billion) and
reduce its holding in the company from around 15% to 8%.
"We were pleasantly surprised with the success of the
Heineken offer," FEMSA's Chief Financial Officer Eugenio Garza
said in a call with analysts, adding the demand may mean FEMSA
could fully divest from Heineken sooner than projected.
Shares in FEMSA jumped nearly 9% Thursday after the offer
was launched, and maintained gains around midday Friday.
Analysts at Actinver called the news "positive," following
investor concerns about FEMSA's plans for the future and
"increasing the complexity of the business."
The sale, and bid to simplify FEMSA's operations, will leave
it "with plenty firepower to reignite growth," Actinver added.
FEMSA's retail operations, largely comprised of its Oxxo
convenience stores, will contribute more than two-thirds of the
firm's future revenue and profits, FEMSA said in a presentation.
FEMSA plans to continue opening 800 to 1,000 Oxxo stores a
year in Mexico, Chief Executive Daniel Rodriguez said.
The conglomerate is also planning to accelerate its
expansion in South America and is eying retail spaces in the
United States.
FEMSA is looking for "blank spaces" to move into in the
United States and is open to a tie-up with a third party,
Rodriguez said, as FEMSA is hesitant to take on the "fuel risk"
associated with U.S. convenience stores, which are typically
also gas stations.
Along with the Heineken divestment, FEMSA is looking at
options for its stake in janitorial supply company Envoy
Solutions. That could involve monetizing or distributing shares
to shareholders, Garza said.
($1 = 0.9360 euros)
(Reporting by Kylie Madry; Editing by Sarah Morland and Mark
Potter)
((Kylie.Madry@thomsonreuters.com;))