• ALFA’s conglomerate composition being effectively simplified into wholly-owned food business
• Alpek fully capable of extending successful track record independent from ALFA
• Represents the final spin-off in ALFA’s corporate simplification process

October 22, 2024 -. ALFA, S.A.B. de C.V. announced it will hold an Extraordinary Shareholders’ meeting to present a proposal for the spin-off of its entire ownership stake in Alpek S.A.B. de C.V. to the ALFA shareholders.

Subject to the corresponding approvals, ALFA expects to transfer all its Alpek shares, as well as certain assets, liabilities and capital to a new entity (“Controladora Alpek”) which will be constituted as the spun-off company and listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores).

The ALFA shareholders will receive one share of Controladora Alpek for each of their ALFA shares, in addition to retaining their share ownership in ALFA's equity. The spin-off proposal has been authorized and recommended by ALFA’s Board of Directors, and is subject to approval at the Extraordinary Shareholders’ Meeting that will take place on October 24, 2024. ALFA expects to complete the Alpek spin-off in 2025.

Upon completion of the Alpek spin-off, ALFA’s corporate structure would be fully transformed from an industrial conglomerate to a single, wholly-owned food company: Sigma.

According to Alfa, Alpek is well positioned to be a stand-alone entity as a market leader with independent corporate governance, an experienced management team and a solid financial position.

Alpek is a Mexican plastics manufacturer with global operations. The company focuses on the PET (PTA/PET/rPET) polystyrene and PP value chains. It also leads in EPS in the Americas.

Its operations are located mostly in Mexico (36% of capacity) and the US (31% of capacity), with Brazil and Oman as other important operations (about 10/15% each) and then smaller global operations (Argentina, UK, Chile, Saudi Arabia).

The company has a capacity of about 7 million tons of polyesters, making it the largest PTA and PET producer in the Americas and #2 in PET in the World. Polyester chain products make up about 80% of the company's production and revenues and between 75% and 50% of EBITDA.

PTA is the precursor of PET, made out of naphtha-derived paraxylene. PET is mainly used for bottles and other plastic containers for food and consumer goods like cleaning products, and, to a lesser extent, in textile fibers and other uses.

ALPEK also produces polypropylene (PP), used mostly in food packaging, and expanded polystyrene (EPS).

Source: Alfa