Cofece approves merger between Azucar Grupo Saenz, Azudomi and Impulsora Azucarera del Noroeste
Mexico‘s Federal Economic Competition Commission (Cofece) approved a merger between Azúcar Grupo Saenz, Grupo Azudomi and Impulsora Azucarera del Noroeste.
Initially, on February 14, 2023, Impulsora Azucarera del Noroeste, (Impulsora), Azúcar Grupo Saenz (AGS) and Grupo Azudomi (Azudomi) notified Cofece of their intention to enter into a concentration.
The notified transaction consists of the direct and/or indirect acquisition by Impulsora and another participant of shares representing the capital stock of Ingenio Tamazula and Cosechadoras del Sur de Jalisco, S.A. de C.V. (Cosujal), currently owned directly and/or indirectly by Azudomi and AGS, respectively.
In addition to the above, Cofece gave practically no further details about the transaction.
According to Organización Cultiba, the Mexican sugar industry, which is estimated to employ approximately 500,000 workers, has historically been characterized by significant government regulation and intervention.
As a result of expropriations that took place in 2001 stemming from a crisis in the sugar industry, the Mexican government, through FEESA, was until mid-2015 the largest sugar producer in the country, with production in the 2014/2015 Zafra of about 22.2% of Mexico’s sugar, through nine of the 52 sugar mills in operation in the country, according to data from the National Chamber of the Mexican Sugar and Alcohol Industries (CNIAA).
However, since 2004, and until the end of 2015, 25 of the 27 originally expropriated sugar mills were reverted to the private sector at different times, the latest occurring during 2015.
Thus, on March 26, 2015, the Mexican federal government, through the Servicio de Administración y Enajenación de Bienes, called for a public tender for the sale of the nine sugar mills under its responsibility, a process that partially culminated on June 12, 2015.
As a result of that bidding, four of the nine mills put out to bid (Atencingo, San Cristóbal, Casasano, and Emiliano Zapata) were acquired by private sector companies.
The bidding was reopened in September 2015 for the remaining five mills, and three additional mills (El Modelo, La Providencia, and Plan de San Luis) were awarded to the private sector in December 2015, leaving only two mills under Mexican government operation (El Potrero and San Miguelito), which were acquired by BSM in 2016.