GEUPEC, Empresas Polar and PepsiCo Join Together to Create a Nationwide Beverage Company in Mexico

Grupo Embotelladoras Unidas, S.A.B. de C.V. (GEUPEC), Empresas Polar and PepsiCo today announced that they have entered into an agreement under which they will form a new joint venture, creating a nationwide beverage company in Mexico.

The joint venture will combine PepsiCo-owned beverage manufacturing and distribution operations in Mexico with those of GEUSA, the other Pepsi bottler in Mexico and a subsidiary of GEUPEC. Empresas Polar, the largest food and beverage company in Venezuela and a longtime leading bottler of Pepsi-Cola products in that country, will have an equity stake in the joint venture.

The joint venture will offer Mexican consumers and retail customers a strong portfolio of carbonated and noncarbonated brands including Pepsi, Gatorade, 7Up, Lipton, Mirinda, Santorini, Squirt, Electropura, ePura and BeLight throughout the country. The broad scope of its distribution network will reach 950,000 points-of-sale and to 1.7 million households with its direct-to-home delivery system. Its 36,000 employees will operate 287 distribution centers and more than 17,500 sales and delivery vehicles.

“We are confident that the strong partnership between GEUPEC, Empresas Polar and PepsiCo will represent great growth opportunities, make us more competitive and innovative, and allow us to provide excellent service to our customers and consumers,” said Juan Gallardo, Chairman of GEUPEC.

“We are committed to playing an important role in this joint venture, supported by our operational expertise in the food and beverage industries,” said Lorenzo Mendoza, CEO of Empresas Polar. “With our long-term vision and great partners, we are confident in building a highly competitive beverage company for all stakeholders in Mexico.”

“PepsiCo has invested for many years in Mexico and intends to continue investing to build both its beverage and food businesses,” said Massimo d’Amore, CEO of PepsiCo Beverages Americas. “PepsiCo products have been offered in Mexico for more than 100 years, and today’s announcement is further proof of our commitment to Mexico.”

“This new business model will allow us to create synergies and streamline our supply chain,” said Pepsi Beverages Company CEO Eric Foss. “We’ll also be quicker, more agile and better able to meet the changing demands of today’s consumers.”

GEUPEC will initially maintain a majority interest in the joint venture, whose governing board will include representatives of the three equity partners. Miguel Antor, current CEO of Pepsi-Cola Venezuela, a unit of Empresas Polar, has been designated CEO of the new joint venture. Antor’s extensive experience in this market includes a 20-year career at Empresas Polar as well as serving as marketing director for PepsiCo’s Mexican beverage business.

This transaction is subject to approval by the Federal Competition Commission of Mexico and is expected to be completed by the end of September, 2011.