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Mexican bottler Coca-Cola FEMSA S.A.B. de C.V. (KOF - Snapshot Report) has entered into a definitive agreement to take over the second largest privately-owned bottler in the Brazilian Coca-Cola system, Spaipa S.A. Industria Brasileira de Bebidas (Spaipa), to augment its Brazilian business volume by 40% for $1.9 billion.

Coca-Cola FEMSA is co-owned by the Coca Cola Company (KO - Analyst Report) and Fomento Economico Mexicano S.A. (FMX - Analyst Report) also known as FEMSA. It produces and distributes Coca-Cola, Fanta, Sprite, Del Valle and other trademark beverages of The Coca-Cola Company. It also distributes bottled water, juices, teas, isotonics, beer and other beverages in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Brazil, Argentina and Philippines.

The all-cash deal is to be financed with new bank debt, will be geographically beneficial as it will link FEMSA’s distribution territories in the states of Sao Paulo and Mato Grosso do Sul.

Spaipa has operations in the states of Sao Paulo and Parana, with four bottling plants, seven distribution centers and more than 6,000 employees serving almost 17 million consumers.

The acquisition, subject to approval of the Brazilian antitrust authority, will accrue $33 million as earnings before interests, taxes, depreciation and amortization (EBITDA) in the coming 18 to 24 months to KOF.

FEMSA is on an acquisition spree and has been acquiring Coke bottlers in the Latin American region for the last two years. In January, the cola giant entered into a definitive agreement to acquire Mexico-based Coca-Cola bottler Grupo Yoli, S.A. de C.V. for $700 million.

Again in August, it acquired its Brazilian peer Companhia Fluminense de Refrigerantes for $448 million in an all cash transaction. The company is also expanding its operations beyond Latin America and acquired a 51% interest in Coca-Cola Bottlers Philippines, Inc. by 2013.

Beverage giants are fast expanding into emerging markets. Coca Cola’s peer Pepsico Inc. (PEP - Analyst Report) traded its bottling operations in China for a position in Tingyi Holding’s beverage business.

Currently, Coca-Cola FEMSA carries a Zacks Rank #3 (Hold).

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