LONDON -- Cadbury Schweppes, Britain's largest confectionery and soft drinks company, said Wednesday it has agreed to buy Mexico's leading mineral water supplier Femsa Aguas Minerales for 188 million pounds ($325 million).
The deal will increase Cadbury's share of the Mexican soft drinks market to 5.7 percent from 1.8 percent and give it access to an established bottling and distribution network, the company said.
Aguas Minerales is Mexico's leading bottler and distributor of mineral water with the largest single slice of the mineral water market there.
Dominic Cadbury, chiefexecutive of Cadbury Schweppes, said the acquisition would give Cadbury 'a major opportunity in Mexico, the second-largest soft drinks market in the world.'
He said there was considerable potential in the fast-growing Mexican market.
Cadbury plans to partly pay for the deal by placing 34.4 million new Cadbury's shares at 425pence ($7.31) each to raise around 145.1 million pounds ($250 million). The balance of the acquisition of Aguas Minerales from FEMSA, Mexico's largest beverage business, will be paid in cash.
On the London stock market, news that Cadbury would be placing the block of new shares knocked the confectionery and drinks company's shares down 10pence to 433pence (17 cents to $7.45) by 4 p.m.
Aguas Minerales made 13 million pounds ($22.3 million) pre-tax profit on revenue of 73 million pounds ($125.5 million) in 1991.
Cadbury Schweppes' revenue in the same year was 3.23 billion pounds ($5.55 billion), on which it made pre-tax profits of 316.4 million pounds ($544 million).
Cadbury will take over Agua Minerales brands, as well as mineral water springs in five places in Mexico, a concentrate factory and a distribution network and a combined work force of 3,900 employees.
The Mexican deal is part of the British-based firm's strategy for global expansion that prompted it to buy brands and facilities in different world markets and start a joint venture in 1991 with German mineral water company Apollinaris.