Acquisition

Femsa to buy Valora for up to $1.2 Billion to enter Europe

Valora pursues a multi-format strategy with 12 sales formats and some 2.700 outlets in Switzerland, Germany, Austria, Luxembourg and the Netherlands. According to a press statement of Valora, all brands and formats will be retained in accordance with Valora’s current management’s expansion and operating plans.
Valora
Valora pursues a multi-format strategy with 12 sales formats and some 2.700 outlets in Switzerland, Germany, Austria, Luxembourg and the Netherlands. According to a press statement of Valora, all brands and formats will be retained in accordance with Valora’s current management’s expansion and operating plans.

Fomento Económico Mexicano, (FEMSA), a leading retail and beverage company with total sales of more than USD 27 billion in 2021, today announced an all-cash offer to purchase all of the publicly held shares of Valora Holding AG (Valora) for CHF 260.00 per share. This is equivalent to a premium of 57.3% to the volume-weighted average share price of the last 60 trading days and 52.0% to the Valora closing share price on July 4, 2022.

Based on an external fairness opinion, the Valora Board of Directors unanimously recommended that shareholders accept the offer by FEMSA. Valora’s largest individual shareholder owning a stake of approximately 17%, supports the offer and is undertaking to tender all of his shares as part of this offer.

In an ad-hoc-release Valora explained, that both companies were greatly aligned regarding their strategic priorities and long-term value creation opportunities. The Swiss company states: “Valora is expected to accelerate its growth path by leveraging FEMSA’s core convenience skill set and to serve as a platform for additional growth in the European convenience store and food service (foodvenience) market. The transaction between FEMSA and Valora will also create a formidable player in the European convenience store and food service market catering to an increasingly mobile and digital clientele.”

Valora will continue to operate under its own company name, becoming the retail arm of FEMSA’s Proximity Division in Europe. Valora will continue to be headquartered in Muttenz (Switzerland) and will take on responsibility for further developing the European convenience markets for FEMSA. Valora’s brands and formats will be retained in accordance with Valora’s current management’s expansion and operating plans.

 
About Femsa
Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) is headquartered in Monterrey (Mexico) and listed on the Mexican and New York stock exchanges. FEMSA operates the largest convenience store chain in Mexico and Latin America (Proximity Division), as well as more than 3,600 pharmacies in four Latin American countries, and controls the largest franchise bottler of Coca-Cola products in the world in terms of sales volume (Coca-Cola FEMSA). FEMSA is the second largest shareholder of the Heineken (HEIA.AS) group and is listed on the Mexican stock exchange (ticker symbols: FEMSAUBD.MX; FEMSAUB.MX) and on the New York Stock Exchange (ticker symbol: FMX).

Ambition to accelerate Valora’s growth plans

Daniel Rodriguez Cofré, CEO of FEMSA, comments: “FEMSA and Valora have each been around for well over one hundred years, and both companies have developed successful business models and strong corporate cultures. Having built a significant store base and convenience and logistics expertise in Latin America during the past four decades, FEMSA has been looking for a platform to grow and develop our proximity retail business in markets outside of Latin America. Valora has earned an excellent reputation in the international convenience and food service business with its sophisticated concept of innovative formats at high-traffic locations, and we look forward to further expanding on this strategy with the continued support of Valora’s management, who will together with the Valora team members play a key role in our plans for the company’s future.”
 
“As the largest franchise bottler by volume in the global Coca-Cola system, as well as the second largest shareholder of Heineken, we are fortunate to have close business relationships with many of the leading consumer products companies in the world. Now we are joining forces with Valora to become one of the leading convenience and food service platforms in Europe, serving the needs of an increasingly mobile and digital clientele,” says Carlos Arenas, CEO of FEMSA’s Proximity Division. “Valora has the knowledge, experience, network and operating and cultural understanding required to expand rapidly and sustainably in the various European markets, while we bring to bear proven expertise in scaling growth, and the opportunity for cross fertilization of best practices.”
 
Femsa participates in retail trade through FEMSA Comercio, comprised by a Proximity Division of which OXXO, a small-format store chain, is a part of; a Health Division, which includes pharmacies and related activities; and a Fuel Division, which operates the OXXO GAS service station chain.
IMAGO / NurPhoto
Femsa participates in retail trade through FEMSA Comercio, comprised by a Proximity Division of which OXXO, a small-format store chain, is a part of; a Health Division, which includes pharmacies and related activities; and a Fuel Division, which operates the OXXO GAS service station chain.

“The transaction with FEMSA, which does not yet have any operations in Europe, is extraordinary in that it creates unique opportunities for both companies with benefits for all stakeholders. After the transaction, Valora will operate as the European retail affiliate within FEMSA’s Proximity Division and will continue with its existing growth strategy to create sustainable value,” comments Valora Chairman Sascha Zahnd on the unanimous decision of the Board of Directors in favour of the intended transaction with FEMSA.
 
“FEMSA and Valora complement each other very well with their growth-oriented strategies in the convenience store and food service businesses, capacity for innovation, and digitalisation philosophy,” comments Valora CEO Michael Mueller on the planned transaction with FEMSA. “We aim to pro-actively drive the growth of the sector and can benefit from FEMSA’s resources and extensive experience as a leading retail company. The new scale and opportunities offered by the transaction with FEMSA, as well as FEMSA’s willingness to continue implementing our successful growth strategy under existing management and employees, convinced Valora’s Group Executive Management to support FEMSA’s offer to become an integral part of the FEMSA Group.”
 
The tender offer is subject to customary terms and conditions as well as regulatory approvals for this type of transactions, and is expected to be settled end of September or beginning of October 2022. The intention is to then delist Valora from SIX Swiss Exchange. The pre-announcement of the offer which has been published today includes the material terms and conditions of the public tender offer.
 

Valora reports recovery

Also today, Valora states that external sales for the first half of 2022 are expected to be up around 20% and EBIT on a recurring basis to be slightly higher on the prior-year period. The business was still heavily impacted by the COVID-19 Omicron variant, in particular in the first quarter 2022. The half-year result is based on significant business improvement. Valora managed to successfully advance the implementation of its foodvenience strategy in the reporting period. The Group expects to be able to confirm the EBIT guidance for 2022 (excl. M&A-related costs) when it publishes its 2022 half-year results on 20 July 2022.

In the reporting period, Valora continued the implementation of its foodvenience strategy. This is confirmed by the acquisition of Frittenwerk, which was closed on 1 July 2022, and the expansion of Valora’s cooperation with Oel-Pool to gradually take over 71 service station shops, which is expected to take place from April 2023.

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