Mexico City, April 12th, ,2019.- Basham, Ringe y correa, through the partner Juan Carlos Serra and the associates Jorge Escobedo, Ricardo Evangelista and Mariana Arrieta, assisted and advised to Carretera 57 Propiedades, S. de R.L. de C.V. and Embotelladora Niagara de México, S. de R.L. de C.V. which are part of one of the biggest label bottled water companies in United States of America known as Niagara Bottling.

Niagara Bottling’s subsidiaries main activities consist in producing and supplying its own water brand Niagara® as well as in labelling bottled water for grocery, club stores, convenience and wholesale customers, including bottle design. Niagara has over 55 years of experience in the industry and has been positioned as the most vertically integrated bottling company which manufactures its products with the most rapid, automated and technologically advanced water bottling system in the world.

The firm has assisted Niagara in expanding its bottling operations to Mexico, specifically, at this moment, by setting up two major bottling water facilities in the Mexican State of Nuevo León and the State of Mexico and designing a whole scheme to produce and supply its products throughout the Mexican territory, as well as to produce labelled water for major retail and wholesale stores. Legal assistance has also included reviewing and advising in connection with additional possible projects to be developed in the coming years.

Niagara´s first bottling facility in Mexico is located in the municipality of Salinas Victoria, Nuevo León in an industrial park known as “Interpuerto” located within a strategic point for manufacturing, commerce and logistics and where important companies related to the energy, food and car manufacturing sectors have developed their facilities. Interpuerto is built on a surface area of approximately 1433 hectares. For this project, Niagara invested approximately USD $95.00 million and generated 130 direct jobs, producing annual estimated volumes of 200,000 units of bottled water. Niagara´s facility was built on a surface area of approximately 111,000 square meters. Niagara began operation in Interpuerto in 2016.

Niagara´s second bottling facility opened up in April 02, 2019. It is located in the State of Mexico in Soyaniquilpan de Juárez Municipality within one of the biggest industrial parks known as “Arco 57” and in a property that has over 117,000 square meters. Niagara´s bottling facility expects to have approximately 4 production lines and has 2 water wells from which water will be extracted for day-to-day operations. Facility expects to produce 23 bottles per second and approximately 456 million bottles per year.

The purchase operation of the real estate property in which the second facility is located included negotiations and participation of a major financial institution known as CIBanco, who acted as trustee and seller of the property and an escrow managed by an escrow agent in which purchase price was deposited.

The firm has assisted Niagara in the implementation of legal and commercial schemes to secure the required volumes of water to operate its facilities and to produce its commercial water brands by means of water concessions granted by the federal government.   

In addition to the real estate and water matters previously referred to above, the firm assisted Niagara and the Companies in all necessary corporate and necessary governmental permits, including advice related to regulatory matters such as the required permits and/or authorization from federal, local and municipal authorities for the completion of both facilities.

This matter is of high relevance for several reasons:

-            First of all, because one of the biggest bottling water companies in United States seeks to expand its operations in Mexico by building first class water bottling facilities with the best technology which currently exists in the industry, which not only represents significant investments for Mexico and the creation of direct jobs in places where such facilities are located , but also a new competitor in the Mexican industry, which is currently controlled by a few major companies.

-            Second, the industry of bottling water itself, is a growing industry in Mexico and even though the biggest companies produce their own bottled water which is sold in most of the biggest retail stores in Mexico, it has been increasingly common practice for some stores to sell their own branded / labelled bottled water produced and labelled by companies such as Niagara.

Other firms and organizations involved: Kavanagh Gorozpe Abogados, counsel for the sellers, CIBanco, seller and trustee in the operation. Artha´s. Developer´s of the industrial park. First American Title Insurance Company, acting as escrow agent. Desarrollos Urbanos e Industriales del Estado de México, acting as joint obligor of Artha Capital and developer of Arco 57 Industrial Park.

Transaction amount: Facility located in Nuevo Leon: Approximately USD $95.00 million. Facility located in the State of Mexico: USD $80.00 million.