Grupo Bimbo, a major Mexican baking company, is in discussions with Dunedin Holdings Sarl, a subsidiary of Canadian food processing and distribution company George Weston Limited, regarding a possible acquisition by Bimbo of Dunedin’s U.S. baking business, according to a report in El Universal that cited a Bimbo securities filing with the Mexican Stock Exchange (Bolsa Mexicana de Valores).

Cascade Investment, LLC, the investment vehicle owned by Bill Gates, and The Bill & Melinda Gates Foundation Trust, have increased their ownership stakes in Monterrey-based Mexican beverage companies, Coca-Cola FEMSA, S.A.B. de C.V. (NYSE: KOF) and Fomento Economico Mexicano, S.A.B. de C.V. (NYSE: FMX), by acquisition of additional American Depository Shares (ADSs). 

According to a Schedule 13D filed with the SEC on August 1, 2008, Cascade Investment and The Bill & Melinda Gates Foundation respectively owned 857,128 ADSs and 4,561,072 ADSs of FEMSA as of August 1, 2008, representing 3.16% and 16.84% of the company’s Series L Shares. 

And according to a Schedule 13G filed with the SEC on September 5 2008, Cascade Investment and The Bill & Melinda Gates Foundation respectively owned 20,966,975 ADSs and 747,600 ADSs of Fomento Economico Mexicano as of September 5, 2008.

Cascade also owns 19.7 million shares of Mexican broadcaster Grupo Televisa (NYSE: TV), according to Reuters.

Mexican tortilla and cornflour maker Gruma, S.A.B. (NYSE: GMK) said that the mark-to-market value of its exchange rate derivatives positions was a negative US$684 million as of Oct. 8, according to a Dow Jones report.

Responding to a request by the Mexican stock exchange for information on its financial position, Gruma said most of the maturities on its derivatives are in 2009, 2010 and 2011.

With respect to Gruma’s exchange rate derivative liabilities in 2008, a November 13, 2008 Sentido Comun report said that the company had obtained a credit line from an undisclosed lender that it will use to close out its derivative positions requiring payments this year. It appears that the company’s 2008 derivative liabilities are the result of margin calls made by the contracting counterparty following the sharp depreciation of the peso in recent months. Without the credit line, the report said Gruma would have been required to pay US$276 million on November 25, 2008 to the counterparty. Gruma did not reveal the name of the counterparty or the financial institution that had brokered its purchase of exchange rate derivative contracts; it may be speculated, however, that they are major Wall Street firms.

The peso’s depreciation has caused a number of major Mexican companies to generate mark-to-market losses in their derivatives positions and engendered extraordinary demand for dollars that sent the peso to record lows and prompted Mexico’s central bank to sell $8.9 billion in the exchange market.

Gruma owns a 9% interest in Grupo Financiero Banorte, the fifth largest bank in Mexico. Gruma said it was exploring financing alternatives to settle its obligations relating to its derivatives with maturities in 2009, 2010, and 2011, which are not currently subject to margin calls.

JP Morgan Chase has sued iconic Mexican supermarket operator Controladora Comercial Mexicana (CCM) (MXK: COMERCIUBC) in a New York state court alleging breach of its obligation to maintain collateral in its exchange-rate derivative transactions, according to a Sentidocomun.com report, which cited a Bloomberg report.

The lawsuit seeks US$477.5 million from CCM.  CCM said that it had been notified of the lawsuit and that it expected to be the subject of similar actions in the next few days in the wake of its October 9, 2008 petition filed with a Mexico City bankruptcy court seeking creditor protection (concurso mercantil).  The report said that Barclays, Goldman Sachs Group, and Merrill Lynch had filed similar lawsuits against CCM.

As Mexico Law Blog reported on October 27 and 29, 2008, CCM’s October 9, 2008 bankruptcy filing was rejected by the Mexican bankruptcy court for undisclosed reasons; following the rejection, the company announced plans to immediately file a new petition, which it did on October 28 or 29, 2008.  No news has been issued confirming the acceptance or rejection by the Mexican bankruptcy court of the company’s new petition.

In October 2008, CCM’s debt inflated to US$2 billion following huge losses on exchange-rate derivative bets against the dollar, according to a Reuters report.  CCM said in late October that it had obtained loans worth up to MX$3.327 billion to continue paying suppliers.  One of the loans, for up to MX$3 billion, is guaranteed by Mexican development bank Nacional Financiera (NAFIN).

Wal-Mart de Mexico, S.A.B. de C.V. (ADR OTC: WMMVY) has frozen prices on more than 500 basic products that are private label Wal-Mart brands, as well as the cost of tortillas (to MX$5.05 pesos per kilogram), in all Wal-Mart Super Centers in Mexico, according to an Excelsior.com report.  The price freeze will remain in effect until December 31, 2008.

A Mexico City judge rejected the petition of Mexico’s third-largest retailer Controladora Comercial Mexicana (CCM) for bankruptcy protection (concurso mercantil), which would have allowed it to renegotiate the terms of its debt with creditors, according to a report in El Economista.

The report said CCM will file a new petition in the next few hours.

Jeremy Schwartz’s Uncovering Mexico Blog has a nice post cataloging his foreign press corps visit with Carlos Slim, an excerpt of which is set forth below:

The talk, which perhaps naturally focused on the financial crisis gripping the U.S., was mostly pleasant, although Slim did get testy when pressed about his personal wealth and monopolistic practices. Here are some highlights:

—Slim urged more flexibility and creativity in dealing with homeowners facing foreclosure, suggesting temporary, interest-only loans as an alternative to seizing a home. “There need to be solutions…that aren’t total punishment,” he said.

—There was much curiosity about Slim’s recent purchase of 6.4 percent of the New York Times’ stock. Many of the ink-stained wretches wondered what Slim saw in newspapers at a time when the industry is suffering through its own crisis. Slim, much to our relief, argued that there will always be a need for quality content regardless of the packaging. “It’s an evolution,” he said of the newspaper business. “The ones that don’t evolve will disappear.”

—Slim took umbrage to any suggestion that his companies were bad for Mexico, lashing out at one reporter: “To think that in poor countries there shouldn’t be strong companies is perverse,” he said. “Why should foreign companies (be the only ones that prosper)…The ideal would be that there were more companies like this.”

—He also turned the tables when asked about monopolistic practices, complaining that Mexican regulators won’t let him run video over phone lines as part of a so-called Triple Play of cable, telephone and Internet service. On the other hand, cable and other phone companies have accused Telmex of charging outrageously high connection costs to hook up to its monolithic network, forcing many would-be fixed line providers out of the market.