Coca-Cola HBC has agreed to buy a 75% stake in its African counterpart for $2.6bn in a deal that will create the world’s second-largest drinks bottler.
Coca-Cola Beverages Africa is currently owned by The Coca-Cola Company and Gutsche Family Investments, producing around 40% of Coca-Cola volumes sold across Africa
Coca-Cola HBC is one of the largest Coca-Cola bottlers in the world, with operations in 28 markets across Europe and Africa, including Northern Ireland and the Republic of Ireland.
“Coca-Cola HBC is a strong and valued bottler that will help usher in the next chapter of growth for CCBA,” said Henrique Braun, Coca-Cola’s COO and executive vice president.
Coca-Cola HBC will have the option to buy the remaining 25% from Coca-Cola within six years of the deal closing, expected to be by the end of 2026.
Coca-Cola HBC is already listed in London and Athens and plans to pursue a secondary listing on the Johannesburg Stock Exchange.
The deal will add 14 new markets to the FTSE 100 company’s presence in Africa and means it will produce two-thirds of the continent’s total Coca-Cola volumes. This will make it the second biggest bottler of Coca-Cola, behind Coca-Cola FEMSA, which covers Latin America.
Its share price fell 4% on the news, however, a reaction that “betrays some nervousness on the part of the market,” said Russ Mould, investment director at AJ Bell.
“This is a significant deal for the company in monetary terms and represents a slight departure from its previous focus, which has largely been on European markets.”
Edward Mundy, an analyst at Jefferies, agreed the deal changed the growth and risk profile of Coca-Cola HBC, but said the company was well positioned to navigate Africa, having operated in Nigeria for 75 years.
Coca-Cola HBC reported a 5% rise in third-quarter organic revenue on Tuesday, significantly below consensus expectations of 6.3% and lower than its 13.9% growth a year earlier.
Both volume and price mix were lower than expected due to a combination of unfavourable weather, a tougher consumer backdrop, and price hikes.
The group still expects organic revenue growth at the top end of its 6% to 8% range for 2025 though, due to rising prices.
No comments yet