FEMSA and Heineken Part Ways Following Divestment Bid
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FEMSA and Heineken Part Ways Following Divestment Bid

Photo by:   Smit Patel - Unsplash
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Eliza Galeana By Eliza Galeana | Junior Journalist & Industry Analyst - Mon, 02/20/2023 - 09:08

On Feb. 15, 2023, Fomento Economico Mexicano (FEMSA) announced that it would sell the shares it holds in Heineken in a divestment bid. The company aims to focus on boosting other businesses in its retail division. 

In January 2010, FEMSA sold the Cuauhtémoc Moctezuma Brewery to Heineken in exchange for a 20% stake in the Dutch beer brewer. However, FEMSA reduced its stake by 5.24% in 2017. Currently, the company owns 14.76% of Heineken’s shares. 

FEMSA will offer a total of US$3.7 billion in common shares and unsecured notes to a group of qualified investors who will have the opportunity to acquire shares of both Heineken N.V. and Heineken Holding N.V.  According to FEMSA, Heineken committed to buying back at least US$755 million worth of shares of Heineken N.V. and at least US$316 million in shares of Heineken Holding N.V., representing an amount of up to US$1.06 billion. 

As part of its new business strategy, FEMSA will seek to maximize the creation of long-term value in businesses with greater strategic relevance and growth potential, as well as financial and competitive strengths. One of the company’s main focuses will be its retail division, featuring businesses like OXXO, pharmacies and gas stations.

OXXO currently has more than 21,000 stores in Mexico, Brazil, Chile, Colombia and Peru. Valora, a convenience similar to OXXO, accounts for more than 2,700 shops in Germany, Switzerland, Austria, Luxembourg and the Netherlands. Moreover, FEMSA owns more than 4,000 drugstores in four countries and has established 568 OXXO Gas stations in Mexico. 

In 3Q22, OXXO reported a total revenue of MX$171.3 million (US$9.2 million). Meanwhile, in this same period, OXXO Gas recorded gains of MX$37.9 million (US$2.04 million) and the earnings for FEMSA’s health branch reached MX$56.02 million (US$3.02 million). 

Daniel Rodríguez, CEO, FEMSA, said the company is convinced the best way to continue to create value in the firm is by exclusively focusing on key businesses where it has built leading platforms with proven capabilities and financial strength. "These actions will significantly simplify FEMSA’s corporate structure, providing greater clarity and strategic focus. Additionally, they will allow us to make capital returns to our shareholders over time," he stated.

So far in 2023, FEMSA shares have risen 6.6% in the Mexican Stock Market (BMV). Its market value stands at MX$578,348 million (US$31.2 million).

Photo by:   Smit Patel - Unsplash

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