FEMSA (FMX) in Springview Capital Management Q2 2023

Strategic Restructuring to Unlock Shareholder Value

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May 20, 2025
Summary
  • Undergoing a radical transformation to improve market valuation.
  • Divesting non-core assets to focus on core operations like Oxxo and Coca-Cola FEMSA.
  • Current valuation offers a discount compared to slower-growth peers.
  • Potential for significant shareholder returns through excess capital deployment.
  • Estimated 30% upside from current levels based on EBITDA projections.

In Springview Capital Management’s Q2 2023 letter, FEMSA (FMX, Financial) was highlighted for its strategic restructuring efforts aimed at enhancing shareholder value. The company’s focus on core assets and divestment of non-core holdings is expected to unlock significant value for investors.

"Mexico-based FEMSA (which stands for “Fomento Economico Mexicano, S.A.B. de C.V.”) is controlled by several Monterrey families but trades primarily under an ADR in New York with Bill Gates (Trades, Portfolio)’ family office Cascade Investment being the largest outside shareholder. This year, FMX’s controlling families have embarked on a radical transformation of the holding company structure. After a decade of share price stagnation, their explicit aim is to improve investor perception and market valuation. The company recently sold its minority stakes in Heineken and a restaurant supply business for combined gross proceeds of ~$9 billion. It has earmarked other noncore assets for sale, which could fetch an additional ~$3-4 billion." — Springview Capital Management, Q2 2023 Fund Letter

Read full letter at gurufocus Springview Capital Management 2023 Q2 page.

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