FOMENTO
ECONÓMICO MEXICANO, S.A. DE C.V.
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By:
/s/ Javier Astaburuaga
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Javier
Astaburuaga
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Chief
Financial Officer
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Item
1 -
Our shareholders would decide to permit our shares to continue to
be
bundled in units beyond May 11, 2008.
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Item
2
-
Our
shareholders would decide to maintain our current share structure
beyond
May 11, 2008.
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3
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Incorporation
By Reference
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3
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Shareholder
Inquiries
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3
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Summary
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4
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The
Items for Decision by our Shareholders
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9
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Major
Shareholders
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15
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Forward-Looking
Statements
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17
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our
annual report on Form 20-F for the fiscal year ended December 31,
2006,
filed with the SEC on June 28,
2007;
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our
reports on Form 6-K, submitted to the SEC on October 29, 2007, and
on
February 19, 2008, containing our earnings release for the quarter
ended
September 30, 2007 and our preliminary unaudited financial statements
for
the year ended December 31, 2007, respectively;
and
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any
future filings by FEMSA on Form 6-K after the date of this Information
Statement and prior to April 22, 2008 that are identified in such
forms as
being incorporated by reference into this Information
Statement.
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SUMMARY
The
following is a brief summary of information contained elsewhere in
this
Information Statement.
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Current
Bylaw Provisions
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Current
Share Structure
Our
share structure is currently composed of Series B Shares, Series
D-B
Shares and Series D-L Shares.
Series
B Shares are the only series of shares with full voting rights, and
they
must represent at least 51% of our outstanding shares. The Series
B Shares
are entitled to dividend distributions without premium and their
holders
may elect a minimum of 11 members to our Board of Directors.
Series
D-B Shares and Series D-L Shares have limited voting rights, and
they may
represent up to 49% of our outstanding shares. Series D-B Shares
and
Series D-L Shares are entitled to receive a 25% premium over dividends
paid to Series B Shares. In addition, holders of the Series D-B Shares
and
Series D-L Shares jointly have the right to elect five members to
our
Board of Directors.
The
following table sets forth the characteristics of our current share
structure under our bylaws:
Table
I - Current Share
Structure
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Share
Characteristics
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Share
Series
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%
of Shares
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Voting
Rights
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Dividend
Rights
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Board
Member Appointment
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B
Shares
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51
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Full
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No
dividend premium
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Minimum
of 11
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D-B
Shares
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24.5
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Limited
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25%
dividend premium
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5
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D-L
Shares
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24.5
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Limited
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25%
dividend premium
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What
happens on May 11, 2008
Absent
further shareholder action, our bylaws provide for the following
changes
in our share structure after May 11, 2008:
· Series
D-B Shares will be converted into Series B Shares; and
· Series
D-L Shares will be converted into Series L Shares.
The
following table sets forth the characteristics of our share structure
under our bylaws as it will exist after May 11, 2008 absent any further
shareholder action:
Table
II - Share Structure after May 11,
2008
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Share
Series
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%
of Shares
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Voting
Rights
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Dividend
Rights
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Board
Member Appointment
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B
Shares
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75
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Full
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No
dividend premium
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Minimum
of 11
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L
Shares
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25
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Limited
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No
dividend premium
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2
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Current
Unit Structure
Our
shares currently exist in the form of two types of units, both of
which
are listed on the Mexican Stock Exchange: B
Units,
which bundle 5 Series B Shares, and BD Units,
which bundle 1 Series B Share, 2 Series D-B Shares and 2 Series D-L
Shares. Our shares trade on the NYSE in the form of American Depositary
Shares (ADSs),
each of which represents 10 BD
Units.
The
following table sets forth the composition of our current unit structure
and the form of trading of our shares:
Table
III - Current Unit Structure and Form of
Trading
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Unit
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Composition
- Current Unit Structure
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Listed
Securities
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B
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five
Series B Shares
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B
Units
are listed in Mexico
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BD
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one
Series B Share, two Series D-B Shares, two Series D-L
Shares
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BD
Units
are listed in Mexico
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ADS
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ten
BD
Units
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ADSs
are listed on the
NYSE
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What
happens on May 11, 2008
Absent
further shareholder action, after May 11, 2008 the following will
take
place:
· B
Units
will be unbundled into five Series B Shares; and
· BD
Units
will be unbundled into three Series B Shares and two Series L
Shares.
After
giving effect to these conversions and unbundling, our ADSs
will represent 30 Series B Shares and 20 Series L Shares.
The
following table sets forth the form of trading of our shares as it
will
exist after May 11, 2008 absent any further shareholder
action:
Table
IV - Form of Trading after May 11,
2008
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Share
Series
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Listed
securities
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B
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Series
B Shares will be listed in Mexico
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L
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Series
L Shares will be listed in Mexico
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ADS
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ADSs
(each consisting of 30 Series B Shares and 20 Series L Shares
trading
together) will be listed on the
NYSE
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Items
for Decision
Following
is a summary of the two Items for Decision by our shareholders that
will
be presented for vote to them on April 22, 2008 in respect of the
structure of our capital stock going forward:
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Item
1
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By
voting in favor of Item 1, our shareholders would decide to permit
our
shares to continue to be bundled in units beyond May 11, 2008.
The
following table sets forth the characteristics of our unit structure
under
Item 1, assuming that our shareholders fail to vote in favor of Item
2 (to
extend our current share structure beyond May 11, 2008). This unit
structure would result in a new BL
Unit:
Table
V - New Unit Structure
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Unit
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Composition
of each new Unit
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B
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five
B Shares
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BL
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three
B Shares, two L Shares
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ADS
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ten
BL Units
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If our shareholders vote in favor of Item 1 as
well as
Item 2 (which would extend our current share structure beyond May
11,
2008), there will be no changes to our current share structure and
current
unit structure. See “Table I” and “Table III” under “Current Bylaw
Provisions” above.
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Item
2
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By
voting in favor of Item 2, our shareholders would decide to maintain
our
current share structure beyond May 11, 2008.
If
our shareholders vote in favor of Item 1 and Item 2, there will be
no
changes to our current share structure or our current unit structure.
See
“Table I” and “Table III” under “Current Bylaw Provisions”
above.
If
our shareholders do not vote in favor of Item 1 (which would extend
our
current unit structure beyond May 11, 2008) and Item 2, then the
changes
provided for in our bylaws regarding unbundling of units and conversion
of
shares would take place. See
“Table II” and “Table IV” under “Current Bylaw Provisions”
above.
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Listing
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Absent
further shareholder action, under our current bylaws, after May 11,
2008
each
B
Unit
would unbundle into 5 Series B Shares and each BD
Unit
would unbundle into 3 Series B Shares and 2 Series L Shares. Our
ADSs
would represent 30 Series B Shares and 20 Series L Shares which would
be
traded together on the NYSE, and our Series B Shares and Series L
Shares
would be separately listed on the BMV. As a result, the listed securities
on the NYSE and BMV would be different. We believe that these differences
in the securities trading on the NYSE and the BMV could adversely
affect
the liquidity and prices for our shares.
If
Item 1 and Item 2 were approved, the current securities listed in
the form
of ADSs
on
the NYSE and on the BMV would continue to be listed in their current
format.
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If
Item 1 were approved and Item 2 were rejected, the ADSs
would represent the BL
Units
listed on the BMV. See “Table V” under “Item 1” above.
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Voting
and Shareholders Approval
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In
order to maintain a unit structure for our shares or continue with
our
current share structure (or both) beyond May 11, 2008, an amendment
to our
bylaws will be required, which means that the majority of the votes
of
each of our outstanding Series B Shares and Series D Shares will
be
required in separate shareholder meetings scheduled for April 22,
2008.
The
Voting Trust (as defined below) has informed us that it will vote
FOR Item
1 and in the same manner as the majority of the outstanding Series
D
Shares with respect to Item 2.
Because
all of the shares underlying our ADSs
are registered in the name of The Bank of New York, as depositary,
holders
of our ADSs
are not entitled to attend our shareholder meetings and therefore
may only
vote through the depositary.
However, holders of record of our ADSs
as
of March 19, 2008 are entitled to instruct the depositary as to how
to
vote the shares represented by their ADSs
at the April 22, 2008 special and extraordinary meetings.
If
the depositary does not receive instructions from any holder of ADSs
with
respect to Item 1 on or before the date established by the depositary
for
this purpose, the depositary will deem this holder to have instructed
the
depositary to have given a discretionary proxy to a person designated
by
us to vote the underlying shares in favor of Item 1. We have informed
the
depositary that we do not wish to receive a discretionary proxy with
respect to Item 2. In accordance with the deposit agreement, the
depositary will deem a holder of ADSs for which no such instructions
are
received to have instructed the depositary to vote or to give voting
instructions with respect to the shares underlying those ADSs in
the same
manner as holders of the majority of the respective series of the
underlying shares voted with respect to Item 2.
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Management
Recommendations
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In
order to maintain an orderly trading market for our shares, FEMSA’s
management believes it is in the best interest of shareholders to
approve
Item 1 and, accordingly, management recommends a vote FOR Item 1
at the
special and extraordinary meetings to be held on April 22,
2008.
FEMSA’s
management makes no recommendation as to shareholders’ vote on Item
2.
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Major
Shareholders
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As
of February 29, 2008, 74.8% of our Series B Shares with full voting
rights
were held through a voting trust the participants of which are members
of
five families several of whom are members of our Board of Directors
(the
“FEMSA
Voting Trust”
or “Voting
Trust”).
If the share conversion currently contemplated by our bylaws were
to
occur, the Voting Trust will continue to own the majority of our
Series B
Shares (but will be reduced to 50.9% of our Series B
Shares).
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Certain
Rights of Minority Shareholders
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Under
Mexican corporate and securities laws, minority shareholders are
granted a
series of protections. These protections apply to all shares, including
those with limited voting rights, such as the Series D-B Shares and
Series
D-L Shares. Certain of these rights were not in existence in 1998
when our
unit structure and our share structure were authorized. Such rights
include the following:
· All
shareholders may vote in shareholder meetings called to vote on strategic
corporate matters such as mergers, acquisitions or divestitures
representing more than 20% of consolidated assets.
· All
shareholders are entitled to the same price for their shares (regardless
of the series of shares they own) in case of public tender
offers.
Regardless
of the results of the voting at the special and extraordinary meetings
of
our shareholders scheduled for April 22, 2008, the rights described
above
will exist for our shareholders.
For
a discussion of the rights of our limited-voting shares, please refer
to
our annual report on Form 20-F filed on June 28, 2007 with the SEC.
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Item
1 - Our
shareholders would decide to permit our shares to continue to be
bundled
in units beyond May 11, 2008.
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Item
2 - Our
shareholders would decide to maintain our current share structure
beyond
May 11, 2008.
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a)
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Approval
of Item 1 only
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b)
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Approval
of Item 1 and Item 2
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c)
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Rejection
of Item 1 and Item 2
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The
bylaws would provide for the continuation of the B
Units
and BD
Units
(or B
Units
and BL
Units
in
the event Item 2 is not adopted) after May 11,
2008.
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The
bylaws would provide for the preservation of all Series D-B Shares
and
Series D-L Shares in their current format beyond May 11, 2008.
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The
bylaw clauses that provide for a change in share voting rights, dividend
rights and Board of Directors composition would be amended to provide
for
the preservation of the current rights after May 11, 2008.
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All
shareholders may vote in shareholder meetings called to vote on strategic
corporate matters such as mergers, acquisitions or divestitures
representing more than 20% of consolidated
assets.
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All
shareholders are entitled to the same price for their shares (regardless
of the series of shares they own) in case of public tender
offers.
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Shareholder
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Series
B Shares
(1)
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Series
D-B Shares(2)
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Series
D-L Shares(3)
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Shares
Owned
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%
of Class
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Shares
Owned
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%
of Class
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Shares
Owned
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%
of Class
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Total
Shares of FEMSA Common Stock
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Participants
under the Voting Trust(4)
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6,914,592,885
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74.78
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0
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0
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0
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0
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38.64%
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(1)
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As
of February 29, 2008, there were 9,246,420,270 Series B Shares
outstanding.
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(2)
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As
of February 29, 2008, there were 4,322,355,540 Series D-B Shares
outstanding.
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(3)
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As
of February 29, 2008, there were 4,322,355,540 Series D-L Shares
outstanding.
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(4)
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As
a consequence of the Voting Trust’s internal procedures, the following
trust participants are deemed to have beneficial ownership with shared
voting power over those same deposited shares: BBVA Bancomer Servicios,
S.A., as Trustee under Trust No. F/25078-7 (controlled by Max Michel
Suberville), Eugenio Garza Lagüera, Paulina Garza Lagüera Gonda, Bárbara
Garza de Braniff, Mariana Garza Lagüera Gonda, Eva Gonda Rivera, Eva Maria
Garza Lagüera Gonda, Consuelo Garza Lagüera de Garza, Alfonso Garza Garza,
Patricio Garza Garza, Juan Carlos Garza Garza, Eduardo Garza Garza,
Eugenio Garza Garza, Alberto Bailleres González, Maria Teresa Gual Aspe.
de Bailleres, Inversiones Bursátiles Industriales, S.A. de C.V.
(controlled by Eugenio Garza Lagüera), Corbal, S.A. de C.V. (controlled by
Alberto Bailleres Gonzalez), Magdalena Michel de David, Alepage,
S.A.
(controlled by Consuelo Garza Lagüera de Garza), BBVA Bancomer Servicios,
S.A. as Trustee under Trust No. F/29013-0 (controlled by the estate
of
José Calderón Ayala, late father of José Calderón Rojas), Max Michel
Suberville, Max David Michel, Juan David Michel, Monique David de
VanLathem, Renee Michel de Guichard, Magdalena Guichard Michel, Rene
Guichard Michel, Miguel Guichard Michel, Graciano Guichard Michel,
Juan
Guichard Michel, Franca Servicios, S.A. de C.V. (controlled by the
estate
of José Calderón Ayala, late father of José Calderón Rojas), BBVA Bancomer
Servicios, S.A., as Trustee under Trust No. F/29490-0 (controlled
by
Alberto, Susana and Cecilia Bailleres), BBVA Bancomer Servicios,
S.A., as
Trustee under Trust No. F/710004 (controlled by Magdalena Michel
de David)
and BBVA Bancomer Servicios, S.A., as Trustee under Trust No. F/700005
(controlled by Renee Michel de Guichard).
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projections
of operating revenues, net income (loss), net income (loss) per share,
capital expenditures, liquidity, dividends, capital structure or
other
financial items or ratios;
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statements
of our or our affiliates’ and partners’ plans, objectives or goals,
including those relating to anticipated trends, competition, regulation
and rates;
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statements
about our or our affiliates’ and partners’ future economic performance or
that of Mexico or other countries in which we operate or have investments;
and
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statements
of assumptions underlying these statements.
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