ZUG, SWITZERLAND: Coca-Cola HBC Holdings (CCH Holdings) has reached agreement to acquire 94.7% of Coca-Cola Bottling Company of Egypt (CCBCE) from its major shareholders including The Coca-Cola Company (TCCC) and MAC Beverages Limited (MBL) for an agreed combined purchase price of US$427 million.
Zoran Bogdanovic, CEO of Coca-Cola HBC, said: “We are excited to welcome CCBCE to our group. We see great potential for this business to unlock considerable opportunities in the NARTD category in Egypt.
With our best-in-class execution capabilities, commercial expertise and world leading approach to sustainability and communities, we believe there is a significant opportunity to create value for all stakeholders. We appreciate the trust placed in us by The Coca-Cola Company and MBL, and look forward to becoming part of the Coca-Cola system in Egypt.”
Abdul Galil Besher, Chairman of MAC Beverages Limited and CCBCE, made the following comment: “We are very pleased to pass on to Coca-Cola HBC the ownership torch of CCBCE. As a leading anchor bottler of the Coca-Cola system, we believe that Coca-Cola HBC will accelerate CCBCE’s growth ambitions, by combining its expertise, breadth of knowledge, know-how and critical mass, with the company’s deep market knowledge developed over our multi-decade presence in Egypt.”
Brian Smith, President and Chief Operating Officer of The Coca-Cola Company, said: “This transaction promises to strengthen our system in Egypt, where the expertise of Coca-Cola HBC will be a complement to the local knowledge and capabilities of CCBCE.
This agreement represents an important development in the Coca-Cola system’s long-term commitment to the growth and development of this important market.”
For the year ended 31 December 2020, Coca-Cola Bottling Company of Egypt (CCBCE) recorded net sales revenue of EGP 7.4 billion and volume of approximately 275 million unit cases and net profit before tax of EGP 135 million. Its total assets as of that date amounted to EGP 5.2 billion.
Coca-Cola HBC intends to finance the Proposed Transactions primarily from its cash resources and incremental use of existing debt facilities, as required.
The Proposed Transactions involve the acquisition of a majority stake of approximately 52.7% of CCBCE from MBL and certain of its affiliated entities and individuals for cash consideration of US$304 million (at current EGP/USD exchange rate 15.73), subject to certain balance sheet adjustments.
An additional earnout amount may be payable based on CCBCE’s financial performance in 2021. It also involves the potential acquisition at the same price per share of another approximately 2.8% stake from certain other minority shareholders pursuant to agreements to be entered into in due course, conditional among other things on completion of the MBL Transaction.
Completion of the MBL Transaction is expected to take place in late Q4 2021, subject to satisfaction of various conditions, including the receipt of certain lender consents under CCBCE’s existing loan facilities and certain regulatory and other conditions.
In addition, the Proposed Transactions include the acquisition of approximately 42% of CCBCE from a wholly-owned affiliate of TCCC for a cash consideration payable at completion of approximately US$123 million and of a convertible loan issued to the TCCC Seller by CCBCE, convertible at its maturity in 2022 into new CCBCE shares at fair market value, for a cash consideration payable at the time of its transfer equal to the outstanding principal amount and unpaid interest thereon (which currently aggregates to approximately US$22 million).
Coca-Cola Bottling Company of Egypt (CCBCE) was founded in 1994 as a joint venture company between The Coca-Cola Company (through the TCCC Seller) and MAC Beverages Limited and certain of its affiliated entities.
MBL and certain of its affiliated entities and individuals currently have an approximately 52.7% shareholding in CCBCE while the TCCC Seller has an approximately 42% shareholding in CCBCE. The balance of the shares in CCBCE are held, and will continue to be held, by a diverse group of minority shareholders.
Coca-Cola Bottling Company of Egypt (CCBCE) is a leading producer of non-alcoholic ready to drink beverages in Egypt operating five bottling plants. Its products include Coca-Cola, Sprite, Fanta, Schweppes, Schweppes gold, Crush and Dasani water. CCBCE recorded volume of approximately 275 million and 266 million unit cases and net sales revenue of EGP7.4 billion and EGP 7.2 billion for the years ended 31 December 2020 and 2019, respectively.
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