Arca Continental to buy majority stake in Tonicorp for $400m

Mexican firm Arca Continental plans to acquire a controlling stake in Tonicorp, an Ecuador-based dairy products maker, for $400m.

Arca Ecuador, a subsidiary of Arca, will buy an 87.4% stake from controlling shareholders by paying $5.55 per share, and launch an offer at the same price for the remaining shares.

Tonicorp produces dairy products, beverages and ice cream under the Toni and Topsy brands, and also offers packaging and plastic containers for industrial and mass-consumption markets.

The company generated revenues of $309m with net profit of $18m in 2012.

The transaction is subject to the receipt of regulatory approval.

During the signing of the contract in August 2013, Arca Continental said that the acquisition will strengthen and create new growth opportunities for the company in South America.

Arca Continental chairman of the board Manuel L Barragán Morales said at the time, "This transaction will boost the presence and competitiveness of our operations in South America, reflecting our confidence to continuing investing in Ecuador and our constant conviction of seeking new ways to create value for shareholders, the community and employees."

The company operates as a Coca-Cola bottler in Ecuador and northern Argentina, and through snack business Inalecsa in Ecuador.

Arca has a presence in the Mexican dairy market through Santa Clara, a joint venture between Coca-Cola and other Mexican bottlers.