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Swiss-based bottler Coca-Cola HBC on Tuesday said it has agreed to buy a 75% stake in its African counterpart for $2.6 billion, creating the world’s second-largest Coca-Cola bottling partner by beverage volume.
Coca-Cola HBC will acquire U.S.-based Coca-Cola’s roughly 42% stake in Coca-Cola Beverages Africa (CCBA) and the Gutsche Family Investments’ entire stake, valuing the African bottler at $3.4 billion, according to company statements.
The transaction puts the renewed group second behind Coca-Cola FEMSA by Coca-Cola bottling volumes and expands Coca-Cola HBC’s footprint in Africa, targeting growing demand in 14 new markets driven by younger consumers.
Coca-Cola HBC will represent two-thirds of Africa’s total Coca-Cola volume, including drinks such as Fanta, Sprite and Monster, and cover more than 50% of the continent’s population, according to J.P. Morgan.
“Coca-Cola HBC is a strong and valued bottler that will help usher in the next chapter of growth for CCBA,” said Coca-Cola Chief Operating Officer Henrique Braun. The Atlanta, U.S.-based beverage giant owns about 23% of Coca-Cola HBC.
The deal for control of CCBA, founded in 2014, will be one of the biggest ever in Africa’s consumer goods space, according to Rothschild, the sole adviser to Coca-Cola.
“This acquisition is about growth,” Coca-Cola HBC CEO Zoran Bogdanovic said during a media call, highlighting the company’s commitment to Africa.
Coca-Cola HBC, which is already listed in London and Athens, intends to pursue a secondary listing on the Johannesburg Stock Exchange, and it has an option to buy Coca-Cola’s remaining 25% stake in CCBA within six years.
Coca-Cola HBC’s emerging markets portfolio, comprising some African, Eastern European and Balkan countries, leads its volumes and sales. However, none represent more than 20% of sales volumes, according to its website.
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