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PCC clears Mexican group’s exit from Coca-Cola Femsa PH

The Philippine Competition Commission approved the 51-percent acquisition in Coca-Cola Femsa Philippines Inc. by two units led by Atlanta-based The Coca-Cola Company.

The anti-trust body said in a decision the proposed acquisition by Coca-Cola South Asia Holdings Inc. and Coca-Cola Holdings (Overseas) Ltd. of a 51-percent stake in Coca-Cola Femsa Philippines would not result in substantial lessening of competition in the market.

Coca-Cola Femsa Philippines is a Philippines-based company engaged in bottling and distribution of Coca-Cola soft drink brands.  Prior to the deal, it was led by Mexican company Coca-Cola Femsa S.A.B. de C.V., the world’s largest franchise bottler of Coca-Cola trademark drinks.

“In view of the recommendation from the Merger and Acquisitions Office on the basis obtained from the parties and other sources to date, the proposed acquisition by Coca-Cola South Asia Holdings Inc. and Coca-Cola Holdings (Overseas) Ltd. of shares in Coca-Cola Femsa Philippines will not substantial lessening of competition in the relevant market,” the PCC said.

It said that post transaction, Coca-Cola Femsa Philippines would be wholly-owned by Coca-Cola South Asia Holdings Inc. and Coca-Cola Holdings (Overseas) Limited.

Coca-Cola South Asia Holdings and Coca-Cola Holdings (Overseas) are indirectly owned subsidiaries of The Coca-Cola Company. 

Coca-Cola Femsa acquired 51 percent of Coca-Cola Bottlers Philippines Inc. from The Coca-Cola Company for $688.5 million in an all-cash transaction in 2013.

It was Coca-Cola Femsa’s first operation outside Latin America and was seen as a potential jump-off point for expansion in the rest of Asia Pacific.

The Coca-Cola Company expressed confidence about the growth prospects of the Philippine bottling operations, adding the market was now in a better position for future success.

Coca-Cola Femsa Philippines has been dealing with labor problems since late 2016.  It warned in August 2017 it might revisit its investment plan in the Philippines, if Congress approved the proposed tax on sugar-sweetened beverages in its original form.

Beverages with caloric and non-caloric sweeteners were taxed P6 per liter while those using high-fructose corn syrup, a cheap sugar substitute, were charged P12 per liter under the first package of tax reforms that took effect at the start of 2018.

Topics: Philippine Competition Commission , PCC , Coca-Cola Femsa PH , Coca-Cola Femsa S.A.B. de C.V.
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