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The Pepsi challenge has headed south of the border. In November the soft drink’s largest bottler, The Pepsi Bottling Group, Inc. (PBG), gulped down the second largest, Pepsi-Gemex, S.A. de C.V., of Mexico City, for approximately $885 million. According to attorneys on the deal, it was the first dual tender offer ever between American and Mexican companies. Somers, New York-based PBG began discussing the transaction in February 2001 but was hampered by its own labyrinthine tax structure and changes in Mexican tax law. PBG ultimately formed a special offering vehicle, incorporated in Spain for its more favorable tax laws, to complete the purchase. Forty percent of Pepsi-Gemex was owned by president Enrique Molina, with another 35 percent held by PepsiCo, Inc. PepsiCo-which also owns 40 percent of PBG-has lost considerable ground in Mexico to its nemesis, The Coca-Cola Company. In 1992 Pepsi controlled 50 percent of the market in Mexico, which is second only to the U.S. in soda consumption. Today Pepsi is the choice of just 20 percent of Mexican consumers, while Coca-Cola holds a 70 percent market share. A tiny percentage of Pepsi-Gemex shares remained unten-dered at press time, but PBG planned to force their sale in a reverse stock split. For acquiror The Pepsi Bottling Group, Inc. (Somers, New York) In-house: Senior vice president and general counsel Pamela McGuire, senior deputy general counsel Steven Rapp, and associate general counsel Regina Allegretti-Davenport. Proskauer Rose (New York): Latin America: Carlos Martinez and associates Robert Ivanschitz, Oliverio Lew, Valarie McPherson, and Carla Passos. Securities: Leon Gold, Arnold Jacobs, Richard Rowe, and Allan Williams. Banking: Jack Jackson. Tax: Solomon Warhaftig. Corporate: senior counsel Henry Smith III and associates Stacey Moore, Rachel Parsons, Gary Ross, R. Bruce Steinert, Jr., Marissa Tiamfook, Ido Warshavski, and Melissa Westbrook. International: associate Ana Vermal. Labor and employment: associate Patricia Gannon. (McPherson and Gannon are in the firm’s Newark office; Rowe is in Washington, D.C.) Martinez was recommended to PBG by the company’s counsel in Mexico. Creel, Garc�a-Cu�llar y M�ggenburg (Mexico City): Samuel Garc�a-Cu�llar and associates Maria Teresa G�emes and Santiago Sep�lveda. For target Pepsi-Gemex, S.A. de C.V. (Mexico City) In-house: General counsel Luis Alejandro Bustos. Fried, Frank, Harris, Shriver & Jacobson (New York): Corporate: John Bibona, Lee Parks, Philip Richter, and associates Shawn Creedon, Meredith Kurzban, and Jennifer Nellany. Tax: Robert Cassanos and Lisa Levy. Mijares, Angoitia, Cort�s y Fuentes, S.C. (Mexico City): Ricardo Maldonado Y��ez and associates Francisco Ib��ez, Fernando Orrantia, and Patricio Trad.-Heather Smith

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