Fomento Economico Mexicano S.A.B. de C.V. FMX, alias FEMSA, is focused on its Forward Strategy, which emphasizes the long-term value creation of its core businesses. In the latest announcement, the company informed that it is closing its earlier-announced divestiture of its plastics solutions’ operations to AMMI in a deal worth $3,165 million pesos. This transaction is cash-free and debt-free.

Being an affiliate of Milenio Capital, AMMI is a key-diversified corporation and is engaged in the production of non-GMO corn and sustainable plastic packaging. Last year on Oct. 28, the company agreed to sell its plastics solutions operations to AMMI.

The aforesaid transaction marks a great move in the execution of its Forward plan. FEMSA’s Forward Strategy concentrates on businesses including retail (including the Health Division), Coca-Cola FEMSA and Digital@FEMSA. The strategy includes exploring alternatives for the company’s strategic businesses, including potential divestments. 

The company has also completed the divestiture of its refrigeration and food service equipment operations, including Imbera and Torrey, to Mill Point Capital LLC, a private equity firm focused on control investments. The deal, valued at approximately 4,060 million Mexican pesos on a cash-free, debt-free basis, was first announced on July 17, 2024. This divestiture supports FEMSA’s balance sheet through cash inflow and advances its strategic focus on core businesses.

What’s More to Know About FEMSA?

However, FEMSA’s shares lost shine in the recent past, falling 17.6% in the past three months, wider than the industry’s 9.1% drop. The company has been witnessing a soft consumer environment, particularly in the Mexican market, for a while. FEMSA faced a tough consumer environment in Mexico in the third quarter, which impacted same-store sales in Proximity Americas due to reduced customer traffic.

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Nevertheless, FEMSA has been doing well in the digital space through its tech and innovation unit, Digital@FEMSA. This aims at building a value-added digital and financial ecosystem for consumers as well as businesses. This unit also focuses on enhancing and leveraging the strategic assets of FEMSA’s core business verticals. 

Coca-Cola FEMSA is at the forefront with its omnichannel approach, while the Proximity division continues to advance digital initiatives within OXXO stores. The company is actively investing in digital offerings, loyalty programs and fintech platforms within its OXXO chains to strengthen its long-term position. FMX currently carries a Zacks Rank #3 (Hold).

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Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report

Freshpet, Inc. (FRPT) : Free Stock Analysis Report

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Vital Farms, Inc. (VITL) : Free Stock Analysis Report

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