UPDATE 1-Mexico's Femsa in talks to buy Panama dairy firm

MEXICO CITY, Oct 14 (Reuters) - Mexican beverages group FEMSA FMSAUBD.MX said on Thursday it reached a preliminary agreement to buy Panama's Grupo Industrias Lacteas, the Central American nation's leading dairy products company.

Terms of the deal were not disclosed and the purchase is still subject to approval by Panama’s competition regulator.

Panamanian media said the purchase would cost the Mexican group $220 million.

A spokesman for FEMSA was not immediately available to comment.

“This transaction would allow the Company to enter into the milk and dairy products category, one of the most dynamic segments in terms of scale and value in the nonalcoholic beverage industry in Latin America,” FEMSA said a news release.

FEMSA is the largest public bottler of Coca-Cola products in the world in terms of sales volume.

The company already produces and distributes products in Panama and many other parts of Latin America.

Grupo Industrias Lacteas leads the dairy segment in Panama, with three manufacturing plants and almost 1,800 employees, FEMSA said. (Reporting by Sean Mattson; editing by Andre Grenon)