Wednesday, July 25, 2007

BRAZILIAN COMPANY BUYS 51% IN PEPSI RD AND WILL ESTABLISH BREWERY

AmBev is the number 1 brewery in that South American country and the fifth largest in the world.

SAO PAULO. AmBev, the largest beer company in Brazil, will expand its operations in Latin America after paying US$100 million for the control of the only distributor of Pepsico in the Dominican Republic, and for establishing a brewery.

AmBev will pay US$60 million for 51% of Pepsi shares in Embotelladora Dominicana CxA (Embodom), and it will eventually increase its participation to 66%, after establishing a brewery and contributing US$10 million more in cash. Embodom distributes Pepsi Cola, 7up, Mirinda, Red Rock and Mont Pellier water.

Scope
Juan Vergara, Ambev's International CEO considered that "the Dominican market is very promising." According to Ambev's estimations, the Dominican beer market is approximately 3.2 million hectoliters per year (35 liters per person, per year), and it generates over US$430 million.

Expansion
This agreement marks the beginning of AmBev's operations in the Caribbean. In the last three years, this company took over the major beer company in Argentina, Uruguay and Paraguay, introduced itself in Guatemala, and made investments in Ecuador and Peru.

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