Chilean Bottler Andina Jumps After Report of Merger Talks

Embotelladora Andina SA, Chile’s largest Coca-Cola bottler, leaped by the most in almost 17 years on a newspaper report that it was in merger talks with Mexican peers Fomento Economico Mexicano SAB and Arca Continental SAB.

The company’s more liquid B shares gained 12.2 percent to 2,100 pesos at 10:18 a.m. in Santiago, the biggest increase since Sept. 1998. Chilean exchanges suspended trading in the shares at 10:21 a.m. pending an official explanation of the move from the company. The IPSA index advanced 0.1 percent.

Citing people close to the negotiations, Chilean newspaper Pulso reported Monday that Andina began talks a couple of weeks ago with Femsa and Arca to explore a merger or the sale of assets to the Mexican companies. Andina hired JPMorgan Chase & Co. to advise on the process, Pulso said.

“Today’s move is because of the report and it makes sense because the beverages industry is frequently having M&A activity,” Sebastian Hartmann, an analyst at Banco Penta, said by phone from Santiago.

An external press relations officer for Andina, who asked not to be named citing company policy, said that the company wouldn’t comment on Pulso’s report. A spokesperson for JPMorgan didn’t immediately answer an e-mail seeking comment.

JPMorgan and Andina have had a business relationship for several years and the bank frequently proposes business association opportunities for Andina, Pulso said, citing a person in one of the controlling families.

Embotelladora Andina produces and sells soft drinks in Chile, Brazil, Argentina and Paraguay. In 2012 it took over the operations of Chilean peer Coca-Cola Polar SA in a $931 million stock transaction. Andina is controlled through a shareholder pact by the Said Somavia, Said Handal, Garces, Chadwick and Hurtado families.