Emb. Andina Falls in Chile Amid Brazil Exposure Concern

Embotelladora Andina SA (AKO/A), Chile’s largest Coca-Cola bottler, fell to a nine-month low on concern it’s expanding in Brazil amid slowing growth and the biggest street protests in 20 years in Latin America’s biggest economy.

Andina’s B shares fell 0.5 percent to 2,740.1 pesos at 11:12 a.m. in Santiago, the lowest price on a closing basis since October. The IPSA benchmark index advanced 0.4 percent.

Andina, which operates in Chile, Brazil, Argentina, and Paraguay, said late yesterday that it agreed to pay 1.22 billion reais ($538 million) for Cia. de Bebidas Ipiranga, a Coca-Cola bottler that operates in the states of Sao Paulo and Minas Gerais. Ipiranga had revenue of 695 million reais in 2012 and earnings before interest, tax, depreciation and amortization of 112 million reais, according to the filing.

“There’s concern about increasing exposure to Brazil at a time of slowing economic growth and political unrest,” Oswaldo Pacheco, an analyst at Banco de Credito e Inversiones (BCI), said in a phone interview from Santiago. “In the long run, this deal should be positive for the company.”

Brazilian economists reduced their growth expectations for the country for the third week in a row, to 2.34 percent this year and 2.8 percent in 2014, according to a survey from the country’s central bank released July 8. President Dilma Rousseff has pledged to improve government services while maintaining fiscal austerity and controlling inflation, after more than a million protesters took to the streets last month to oppose corruption and high prices.

Embotelladora Andina got 32 percent of its first-quarter revenue from Brazil, according to data compiled by Bloomberg.

The deal, which still requires approval from antitrust regulators, may increase revenue from Brazil to about 46 percent, Pacheco said.

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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