Coca-Cola HBC buys Africa stake for $2.6B
One of the largest Coca-Cola bottlers will acquire a majority position in another bottler, forming a major beverage operation across Africa. Coca-Cola HBC agreed to purchase 75 percent of Coca-Cola Beverages Africa from Coca-Cola Company and Gutsche Family Investments for approximately 2.6 billion dollars. The deal creates the second-biggest bottling partner by volume for the soft drink maker. Coca-Cola HBC shares dropped as much as 4.7 percent in London after the firm canceled a share buyback program to fund the purchase.
The transaction advances Coca-Cola’s retreat from bottling operations as the American company diversifies beyond carbonated beverages. Bottling investments represented 13 percent of revenue last year compared with 52 percent nearly a decade earlier. The proportion should fall to about 5 percent after the Africa sale completes next year. South Africa’s Gutsche family receives cash and equity, giving it a 5.5 percent holding in Coca-Cola HBC.
Coca-Cola HBC aims to capture growth opportunities on the continent and plans a secondary stock listing in Johannesburg. Chief financial officer Anastasis Stamoulis called the move confidence in South Africa and Africa. Philipp Hugo Gutsche expanded his father’s enterprise from Port Elizabeth through the acquisitions of numerous franchises across South Africa. The 84-year-old businessman serves on Coca-Cola Beverages Africa’s board, and his family will maintain involvement through its stake.
