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Does FEMSA Leadership Succession Signal C-Store Expansion?

Leader behind OXXO takes top spot at beverage, retail company

MONTERREY, Mexico -- A coming leadership change at Mexico’s FEMSA could signal that the beverage company and convenience-store operator is ready to move forward with its previously announced plan to grow a retail presence in the United States.

Fomento Economico Mexicano SAB de CV (FEMSA) has named Eduardo Padilla Silva as CEO upon the retirement of Carlos Salazar Lomelin on Jan. 1, 2018, as part of the Monterrey, Mexico-based company's long-term talent and succession planning process.

Silva, currently chief financial and corporate officer, joined FEMSA in 1997 and has held several senior positions, including CEO of FEMSA Comercio for 16 years and chief financial and corporate officer of FEMSA for the past 20 months.

During his tenure at FEMSA Comercio, OXXO became a leading “proximity retail” format in Mexico, and FEMSA entered promising new formats such as drug stores and gas stations. Eduardo and his team were key in the development of the culture and processes that enabled this significant growth while positioning FEMSA Comercio to pursue incremental organic and inorganic opportunities in Mexico and beyond, the company said.

The company operates approximately 12,400 c-stores in Mexico and Central America.

OXXO also has aspirations in the United States. The company has said it plans to invest more than $850 million and open as many as 900 U.S. c-stores, but it can’t because of a law in Texas that prohibits retailers from being owned by firms with ties to the liquor industry.

The chain opened its first “proof-of-concept” U.S. c-store in Eagle Pass, Texas, in 2014. It opened its second location in Laredo, Texas, in 2015. Neither sells alcohol.

Lomelin’s career at FEMSA spans almost 45 years, during which he led many of its operations, including FEMSA Cerveza and Coca-Cola FEMSA. He has been instrumental in transforming FEMSA into a major beverage and retail company with operations across Latin America and a growing presence in Southeast Asia, the company said. He will remain on FEMSA’s board and will also remain an adviser to the chairman.

The company said it will name Silva’s replacement “in due course.”

FEMSA participates in the beverage industry through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume, and in the beer industry through its ownership of the second-largest equity stake in Heineken. In the retail industry, it participates through FEMSA Comercio, with a retail division operating various small-format store chains in Mexico and the United States, including OXXO; a fuel division, operating the OXXO GAS chain of retail stations in Mexico; and a health division, which includes drug stores and related operations in Mexico.


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