Formento Economico Mexicano (FMX, Financial) (0.2%) (FMX – $95.19 – NYSE), S.A.B de C.V (FEMSA) is a family-controlled, Monterrey, Mexico-based diversified holding company. The company primarily engages in two lines of business: the operation of convenience stores, pharmacies, and fuel stations in Mexico, South America, and Western Europe; and the bottling and distribution of beverages and other products through its 47% economic interest (56% voting interest) in Coca-Cola FEMSA (KOF), the Coca-Cola Company’s largest bottling partner globally. FEMSA also owns a suite of logistics and distribution businesses that serve the U.S. and Latin American markets, a significant equity stake in the global beer manufacturer Heineken, and a minority interest in U.S. retailer Jetro/Restaurant Depot. In early 2023, FEMSA announced the results of an exhaustive strategic review and stated its intention to divest its interests in Heineken and all businesses not related to retail and beverages. This process, which began with the February 2023 sale of half its stake in Heineken, will significantly strengthen FEMSAs balance sheet and reduce the complexity of its remaining business. Ultimately, there is a variety of ways that FEMSA can use the proceeds of these transactions to benefit shareholders, and further clarity on management’s intentions may serve as a catalyst in the coming months.
From Mario Gabelli (Trades, Portfolio)'s Gabelli Asset Fund first-quarter 2023 commentary.
