MEXICO CITY, Sept 26 (Reuters) - Mexican conglomerate Femsa said on Thursday it had signed a non-binding agreement to acquire a minority stake in U.S. cash-and-carry retailer Jetro Restaurant Depot, adding to recent investments by Mexican firms abroad.
Investment in Mexico has been unsettled by President Andres Manuel Lopez Obrador, who took office pledging to ramp up growth. But he has rattled markets with decisions that have undermined confidence in his stewardship of the economy.
Monterrey-based Femsa said the investment foreseen under the memorandum of understanding (MOU) with Jetro was worth $750 million, and fitted with its strategy of putting money into businesses that can leverage its potential in other markets.
“The transaction allows FEMSA to gain exposure to the U.S. wholesale cash and carry segment by investing with a formidable partner,” Femsa said, adding it expected to sign definitive agreements to formalize the MOU in October.
A few weeks before taking office, Lopez Obrador sparked a major sell-off of Mexican financial assets when he abruptly canceled a new, partly -built $13 billion Mexico City airport, arguing it was tainted by corruption and geologically unsound.
He has also called into question other projects agreed under the previous government, including several natural gas pipeline contracts that he said were unfair to Mexico. That led to a renegotiation he said would save Mexico $4.5 billion.
His criticism of the previous government’s opening of the oil and gas sector to private capital has also raised concern about his desire to encourage business.
While foreign direct investment to Mexico is holding up, domestic investment has been weak, official data shows.
When adjusted for seasonal swings, Mexican gross fixed investment has fallen on an annual basis in all but one of the months that have reported figures since Lopez Obrador took office.
The decline of 7.4% in June, the latest month for which data is available, was the biggest in nearly ten years.
In August, Femsa said it would buy 50% of convenience stores chain Raizen Conveniencias in Brazil in a deal valuing the business at 1.12 billion reais ($283 million).
Femsa has also underlined its commitment to Mexico, saying it plans to invest 61 billion pesos in the next three years.
Shortly after Lopez Obrador took office, Mexican restaurant operator Alsea said it had completed purchase of Spain’s Grupo Vips for about 575 million euros ($657 million).
Data from the national statistics agency shows that gross fixed investment also slipped significantly in the first year of Mexico’s previous president, Enrique Pena Nieto. (Reporting by Dave Graham in Mexico City Editing by Matthew Lewis)