takes over Coca Cola Polar

Last February 2, Embotelladora Andina announced in Santiago the signing of a preliminary agreement that includes the merger by takeover of Coca Cola Polar through a stock swap. This will consolidate Andina as one of the largest bottlers in the region.

While it is still pending approval by the corresponding corporations (including The Coca Cola Company) and regulatory authorities, the agreement between Embotelladora Andina and Coca Cola Polar will mean that Polar shareholders will control 19.68% of Andina’s capital stock.

The transaction strengthens Andina’s position as one of the top Coca Cola bottlers in Latin America, with operations in Argentina, Brazil, Chile and Paraguay.

The new venture formed by the merger will have an annual sales volume of 641 million unit cases, equivalent to a turnover of about 2.6 billion US dollars a year, thus “positioning it as one of the largest Coca Cola bottlers in Latin America,” according to an announcement made by both companies on Thursday, February 2.

The deal will be implemented through a merger and by means of a stock swap, with new Series A and B shares issued by Andina at 0.33269 times the value of each Polar share.

Eduardo Chadwick, Chairman of Polar’s Board of Directors, said during the announcement, “We share the same visions and values with Embotelladora Andina, and this enables us to map out a great future together as the leading Coca Cola bottler in the Southern Cone region.”

“This merger creates a platform that will facilitate the integration of the Coca Cola System by harnessing significant synergies and creating a regional vehicle with excellent growth prospects,” Chadwick said.

What is Andina?

Embotelladora Andina is the third largest Coca Cola bottler in Latin America in terms of volume and one of the top ten Coca Cola bottlers worldwide, with annual volume sales of 499 million unit cases, or about 2 billion US dollars in net sales, in the fiscal year ending in September 2011.

The company began operating in 1946 and supplies franchised territories in Chile, Brazil and Argentina, covering a total market of 36 million people. Andina is the largest producer of soft drinks in Chile and the second largest soft drink maker in Brazil and Argentina. It is listed on the Santiago Stock Exchange and the New York Stock Exchange (NYSE).

What is Polar?

Founded in 1971, Coca Cola Polar focuses on production, distribution and sale of soft drinks under license of Coca Cola.

Polar has franchises in several regions of Chile, Argentina and Paraguay, covering a total market of 12 million people. As of September 2011, Polar’s sales for the preceding twelve months amounted to 564 million US dollars with a sales volume of 142 million unit cases. The company has been listed on the Santiago Stock Exchange since 1992.

What will this mean for the workers?

With every merger or company acquisition by another company with greater global presence, the number of workers has declined significantly. It happened when Brahma and Antarctica merged to form AmBev, and when Panamco was acquired by FEMSA.

So with the Polar-Andina merger, the companies’ trade unions need to be prepared for this coming scenario.