Grupo Lala's rare spinoff sets LatAm IPO precedent

Author: Zoe Thomas | Published: 31 Oct 2013
  • Mexico’s largest IPO this year demonstrated that there continues to be demand in the market, in spite of global economic uncertainties;
  • By spinning off its US assets the company was able to raise its market valuation;
  • Changes to Mexico’s financial system are still expected, though little has been made official creating an environment in which larger valuations are in high demand but smaller firms find it hard to come to market.

The October 16 initial public offering (IPO) of Mexican dairy company Grupo Lala represented the country’s largest such offering this year. Its rare spin-off structure could set a precedent for other would-be LatAm listcos looking to raise their valuation.

Grupo Lala is one of Mexico’s best-known brands. Even so, a decision to spin off...