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FEMSA to Divest Some Operations in Mexico, On Track With Forward Plan
FEMSA to Divest Some Operations in Mexico, On Track With Forward Plan
About this update from Coca-cola Femsa Sab De Cv Units Cons Of 5 Shs -l- + 3 Shs Series -b-
Fomento Economico Mexicano S.A.B. de C.V. FMX, alias FEMSA, is focused on its Forward Strategy, which deals with the long-term value creation of its core businesses.In the latest announcement, the company made a definitive agreement with Grupo Traxión to divest some of its logistics operations doing business as Solistica. Grupo Traxión is a Mexican-based transportation and logistics company. This deal involves consideration of around $4,060 million Mexican pesos on a cash-free, debt-free basis.The aforesaid agreement includes FEMSA’s transportation management operations in Mexico and its contract logistics operations in Mexico, Colombia and Brazil. However, the transaction excludes the company’s less-than-truckload operations in Brazil.The transaction, which is subject to regulatory approvals and required customary conditions, is likely to take place in the coming months. The deal highlights the smooth execution of the company’s Forward plan. FEMSA’s Forward Strategy concentrates on businesses including retail (including the Health Division), Coca-Cola FEMSA and Digital@FEMSA. The strategy includes exploring alternatives for the company’s strategic businesses, including potential divestments. As part of this initiative, FEMSA sold 13.9% of its outstanding shares in Heineken in 2023, reducing its stake to less than 1%. Additionally, in 2023, the company merged Envoy Solutions with BradyIFS, retaining a 37% ownership stake in the combined entity.What’s More to Know About FEMSA?FEMSA has been doing well in the digital space through its tech and innovation unit, Digital@FEMSA. This unit aims at building a value-added digital and financial ecosystem for consumers as well as businesses. This unit also focuses on enhancing and leveraging the strategic assets of FEMSA’s core business verticals. Coca-Cola FEMSA is at the forefront with its omnichannel approach while the Proximity division continues to advance digital initiatives within OXXO stores. The company is actively investing in digital offerings, loyalty programs and fintech platforms within its OXXO chains to strengthen its long-term position.However, FEMSA’s shares have lost shine in the recent past, dipping nearly 14% in the past three months against the industry’s 7.4% growth. This downside is attributable to the continued soft trends in the company’s Health division. The Health division is facing compl...