Fomento Economico Mexicano S.A.B. de C.V. (FEMSA), Monterrey, Mexico, held its annual shareholders meeting yesterday, during which shareholders approved the exchange of 100 percent of FEMSA's beer operations in Mexico and Brazil for a 20 percent economic interest in the Heineken Group and the assumption by Heineken of debt in the amount of $2.1 million dollars.
FEMSA also announced its operational and financial results for the first quarter. Coca-Cola FEMSA total revenues and income from operations increased 4.7 percent and 6.4 percent, respectively. Double-digit income from operations growth in Latincentro and Mercosur divisions drove these results, the company said.
FEMSA Cerveza income from operations increased 12.7 percent. Top-line growth mainly due to higher price per hectoliter in Mexico and strong volume growth in Brazil, combined with lower cost pressures, resulted in an operating margin expansion of 70 basis points.
Jose Antonio Fernandez, chairman and chief executive of FEMSA, said, in a statement: "The first quarter of 2010 demonstrated once again the strength of our diversified platform. While beverage consumers in Mexico were pressured by prevailing macroeconomic challenges, compounded by incremental taxes and affected by cold weather, we saw very solid numbers come out of our South American operations. While comparable sales growth was negative in FEMSA Comercio's northern border Mexican markets, we saw healthy trends in the center and south. And so, today we are able to report a solid set of numbers, with meaningful growth in operating income as well as margin expansion at every one of our businesses.
"In addition to that, today we are well on our way to closing the strategic Heineken transaction. Heineken shareholders have already voted in favor of the operation, most relevant regulators have signaled the green light as well … And so, we are almost at the starting point of a new stage for our company, one that fills us with optimism and enthusiasm. We stand ready and energized to continue driving FEMSA along a path of long-term growth and value creation."
FEMSA, Latin America beverage company, controls an integrated beverage platform that comprises Coca-Cola FEMSA, the largest Coca- Cola bottler in the region; FEMSA Cerveza, one of the leading brewers in Mexico, with presence in Brazil, and an important beer exporter to the United States and other countries; and Oxxo, the largest convenience store chain in Mexico with more than 7,400 stores.
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