WALMART DE MEXICO AGREES TO ACQUIRE
WALMART CENTROAMERICA
FREE TRANSLATION, NOT TO THE LETTER
Mexico City, December 6, 2009
Wal-Mart de México, S.A.B. de C.V. (WALMEX) announces to its shareholders, as well as to the public in
general, that the company signed a final agreement to acquire Walmart Centroamerica, of which Wal-Mart
Stores, Inc. is the majority shareholder with a 51% position, and the remaining 49% is held by minority
shareholders in the region.
Walmart Centroamerica is the leading retailer in the region, operating supermarkets, discount stores, and
hypermarkets in Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica. The company has
consolidated a solid multi-format portfolio of brands, all of them very well positioned in the different
socioeconomic segments that they serve.
The company has 519 stores, 11 distribution centers and one agro-industrial operation that supplies
products to the stores in the region. Sales for the last 12 months to September 2009 amounted to the
equivalent of US$3.3 billion dollars. The fiscal year for Walmart Centroamerica and Walmart de Mexico
ends on December 31.
“I am very pleased to close this year with a historical transaction. The acquisition of Walmart Centroamerica
converts Walmart de Mexico into an international company with 1,929 units in six countries generating more
than US$25 billion dollars in sales. It also gives Walmex shareholders access to additional growth
opportunities in 5 countries, that adds to the existing opportunities in our country,” said Eduardo Solorzano,
President and CEO of Walmart de Mexico.
“Walmart Centroamerica is a profitable company, and has a proven management team that has taken it to
high profitability and efficiency levels. Additionally, it serves a market that is very similar to the Mexican
market. In the course of several years, Walmart de Mexico and Walmart Centroamerica have shared the
implementation of best practices, and have identified synergies that now, with this transaction, offer several
opportunities for the integration of both businesses. The support of Wal-Mart Stores, Inc. to this deal is a
sign of confidence in the leadership of our company, and in the value creation that this will represent for
consumers in Mexico and Central America as well as Walmart de Mexico shareholders,” Eduardo Solorzano
said.
“Additionally, I am pleased that Walmart de Mexico’s expansion plans will retain with the same dynamism
that has always characterized us, as our country continues to offer a great number of opportunities, and
many families will benefit from our stores. We will continue investing with the same long term vision that
has distinguished our company as a leading retailer in Mexico and that has led us to invest $45.5 billion
pesos in the last five years. I am certain that the acquisition of Walmart Centroamerica will ignite a new
growth stage for the company in the region, and will allow us to expand to other nations our vision for
improving the quality of life for the families of our customers,” said Eduardo Solorzano.
Terms of the transaction:
Walmart de México Board of Directors has convened a shareholders’ meeting on December 22, 2009 to
submit the transaction for shareholder approval. The transaction to be submitted contemplates the
consolidation of Walmart Centroamerica in Walmart de México, resulting in the exchange of Walmex shares
and a cash payment.
Walmart de México Audit and Corporate Practices Committee, comprised exclusively by independent
directors, met on November 23, 2009, and resolved to recommend that the Board of Directors approve the
transaction, considering all relevant factors, which include the fact that the transaction is beneficial for all
Walmart de México shareholders.
The Committee took into consideration the participation of a related party, Wal-Mart Stores, Inc., and
concluded that there is no impediment to recommending and executing the transaction due to the benefits
foreseen, the fact that the negotiations were carried out and the terms and conditions were established
under market conditions, and that the operation is beneficial for the corporation and all of its shareholders.
Walmart de Mexico’s Board of Directors approved this transaction in a Board Meeting held on November 23,
2009.
Most of the transaction shall be paid through the issuance of Walmart de Mexico new common stock, which
will be issued as a result of the merger of the two companies. Wal-Mart Stores, Inc. and a substantial
percentage of Walmart Centroamerica minority shareholders agreed to receive new Walmart de Mexico
shares. A smaller portion of the minority stockholders agreed to receive a cash payment for their
participation in the transaction.
Cash payments totaling an approximate $ 1.4 billion pesos, shall be paid with Walmart de Mexico’s current
cash resources. Approximately 593 million new shares will be issued to the shareholders of Walmart
Centroamerica, without dividend rights that might be declared corresponding to Fiscal Year 2009. The
exchange factor for stock comes from relative valuations of the companies to be merged.
Moreover, as part of the acquisition price, payments will be later made both in cash and in Walmex shares.
Thus, the Board of Directors will suggest that the Shareholders Assembly authorize the issuance of 55
million shares that will remain as Treasury shares, neither subscribed nor paid, to be delivered to current
Walmart Centroamerica shareholders, in the case that the acquired corporation meets the requirement of
achieving a specified profitability level.
Walmart Centroamerica profitability is to be assessed annually, for a term that may be extended to ten
years. Upon termination of said term, all Treasury Shares resulting from this transaction, and which have
neither been subscribed nor paid, shall be cancelled.
Potential Benefits of the Operation:
The Central American consumer is similar in many aspects to the Mexican consumer, so this operation
represents an important opportunity for creating synergies, sharing of talent and best practices, and
increasing the profitability of both companies. Thus, this merger represents a strategic step in Walmart de
Mexico’s expansion plans, as it brings an additional source of continuous profitable growth that adds to the
already existing attractive growth potential that Mexico offers.
It is notable that this is the first time that Wal-Mart Stores, Inc. has granted a company from a different
country, in this case Walmart de Mexico, to take on responsibility for the operation of other countries. This
opportunity is even more relevant if we consider that Walmart de Mexico is a publicly traded company, as
the minority shareholders of Walmex will be able to participate, without needing to make additional
contributions, in a profitable business with financial strength, leader in the region, with an experienced team
of associates, and important future growth opportunities.
This operation is thus expected to have a positive effect on Walmart de Mexico’s profitability; that is to say,
net earnings, operating earnings, and EBITDA per share, from the first day and without considering the
synergies that can be achieved in the future.
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About Walmart Centroamerica:
Wal-Mart’s presence in Central America began in the year 2005, when it acquired 33% of the shares of the
Central American Retail Holding Company (CARHCO). In 2006, Walmart increased its participation to 51%
and the local shareholders retained the remaining 49%. With the announced transaction, Walmart de
Mexico will own 100% of the Central American company.
Currently Walmart Centroamerica is one of the largest private employers in the region, with more than
30,000 associates who share the common mission of saving Central American consumers money so they
can live better.
Walmart Centroamerica serves customers through the following business formats:
# of
Units
377
Average
SqFt
8,100
32
28,000
Bodegas:
• Maxi Bodega (Costa Rica, Guatemala, and Honduras)
92
28,700
Supermarkets:
• Paíz (Guatemala y Honduras)
• Despensa de Don Juan (El Salvador)
• La Unión (Nicaragua)
• Más x Menos (Costa Rica)
16
107,000
2
66,800
Business Format
Discount Stores:
•
Despensas Familiares (Guatemala, El Salvador, and Honduras)
•
Pali (Costa Rica, and Nicaragua)
Hypermarkets:
• Hiper Paiz (El Salvador, Guatemala, and Honduras)
• Hipermás (Costa Rica)
Membership Clubs:
• Clubco (Guatemala)
Required Approvals:
This transaction is subject to regulatory approval, from its Shareholders’ Meeting, and to certain other
conditions that are common in these types of transactions.
Conference Call:
Tomorrow, Monday December 7 at 17:00pm (CDT), Walmart de Mexico will hold a conference call, to
provide more details on the operation.
Company Description:
WALMEX is a Retail Sector company whose shares are traded in the Mexican Stock Exchange since 1977.
It operates 1,410 units, broken down as follows:
621
169
98
Bodegas Aurrera
Walmarts
Sam’s Clubs
69
Superamas
86
Suburbias
367
Restaurants, including franchises
Ticker Symbols:
Mexican Stock Exchange:
Bloomberg:
Reuters:
ADR’s sponsored program:
Walmex V
WalmexV MM
WMMVY US
WalmexV.Mx
WMMVY.Pk
WMMVY
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Internet Sites:
www.walmartmexico.com.mx
www.sams.com.mx
www.wal-mart.com.mx
www.superama.com.mx
www.bancowalmart.com
www.suburbia.com.mx
www.vips.com.mx
www.bodegaurrera.com.mx
www.tarjetawalmart.com.mx
Contact us:
Investor Relations:
Corporate Communication:
Mariana Rodríguez
(52-55) 5283-0289
Antonio Ocaranza
(52-55) 5283-0271
Raul Arguelles
(52-55) 5387-9241
m.rodriguez@wal-mart.com
antonio.ocaranza@wal-mart.com
raul.arguelles@wal-mart.com
THIS ANNOUNCEMENT INCLUDES REPRESENTATIONS, STATEMENTS AND PROJECTIONS OF FUTURE PERFORMANCE THAT DEPEND ON FACTS AND CIRCUMSTANCES NOT CONTROLLED BY WALMART DE MÉXICO.
THEREFORE, WALMART DE MÉXICO CANNOT ENSURE THAT SAID REPRESENTATIONS, STATEMENTS AND
PROJECTIONS WILL OCCUR, NOR THE EFFECT THEY MAY HAVE ON THE OPERATION OR FINANCIAL SITUATION.
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