Mexican beverage firm Coca-Cola FEMSA has announced plans to sell its stake in Coca-Cola FEMSA Philippines (CCFPI) to The Coca-Cola Company (TCCC).

TCCC will acquire a 51% stake as part of the transaction, which represents all of Coca-Cola FEMSA shares in CCFPI.

The price would be determined according to an agreed formula, which cannot be more than the aggregate enterprise value of the original acquisition.

Coca-Cola FEMSA CEO John Santa Maria said:  “As part of our efforts to expand our geographic reach, we have been operating in the Philippines for more than five years, deploying our expertise and capabilities to develop and operate in fragmented markets, leading to an efficient turnaround of this operation.

“Exercising our put option represents the best course of action for Coca-Cola FEMSA’s shareholders.”

“However, given the recent evolution in the business outlook in the Philippines and our commitment to a disciplined capital allocation approach focused on driving shareholder returns, our board of directors has concluded that exercising our put option represents the best course of action for Coca-Cola FEMSA’s shareholders.”

Coca-Cola FEMSA noted that it will work with TCCC in all aspects of the transaction and would cooperate in order to ensure a smooth transition of the CCFPI business.

Maria further added: “This was not an easy decision, and it comes after a deep and thorough process of analysis based on our best interest to protect our shareholders’ value.

“Going forward, we will continue to look and assess other potential strategic opportunities for long-term value creation.”

Coca-Cola FEMSA produces and distributes trademark beverages of The Coca-Cola Company and offers a portfolio of 169 brands to more than 396 million consumers on a daily basis.