LONDON: Coca-Cola HBC AG has entered into a definitive sale and purchase agreement to acquire a 75% shareholding in Coca-Cola Beverages Africa Pty Ltd (CCBA) from The Coca-Cola Company and Gutsche Family Investments Pty Ltd (GFI) for a combined purchase price of US$2.6 billion, implying an equity value for 100% of CCBA of US$3.4 billion.
The acquisition is being funded through a new bridge financing facility to cover the cash consideration and Coca-Cola HBC shares issued to GFI representing 5.47% of Coca-Cola HBC’s enlarged issued and outstanding share capital.
In addition, Coca-Cola HBC and TCCC have agreed to enter into an option agreement enabling Coca-Cola HBC to purchase, or TCCC to sell, the remaining 25% equity interest in CCBA still owned by TCCC following Completion.
Anastassis G. David, Chairman of the Board of Coca-Cola HBC, said: “This milestone marks a historic moment for Coca-Cola HBC and continues our legacy of growth and partnership across Africa. For decades, we have invested to unlock Africa’s extraordinary potential. We look forward to accelerating this positive momentum with CCBA to deliver lasting value for our stakeholders, and make a positive impact in the communities we serve. On behalf of the board, I’d like to thank The Coca-Cola Company and the Gutsche family for their ongoing partnership and trust.”
Zoran Bogdanovic, Chief Executive Officer of Coca-Cola HBC, commented: “We are very excited to announce the acquisition of a majority stake in CCBA, with a path to full ownership.
“Having established our business in Nigeria nearly 75 years ago and with our successful acquisition and integration of the Egypt business three years ago, we have a deep understanding of the compelling proposition Africa presents. It has a sizable and growing consumer base, and there are significant opportunities to increase per capita consumption.
“With our best-in-class bespoke capabilities, commercial expertise and industry-leading approach to sustainability and communities, underpinned by our talent, we believe we have the winning formula to drive sustainable, profitable growth and create value for all stakeholders.
“We appreciate the trust placed in us by The Coca-Cola Company and GFI, and look forward to welcoming the CCBA team to Coca-Cola HBC and driving joint success.”
Henrique Braun, Executive Vice President and Chief Operating Officer of The Coca-Cola Company, commented: “Coca-Cola HBC is a trusted and important bottler and will play a key role in CCBA’s next phase of growth. Like Coca-Cola HBC, we see tremendous opportunity for growth and value creation in Africa. We appreciate Coca-Cola HBC’s vital role in The Coca-Cola Company system and ongoing investment in growing our business.”
Philipp H Gutsche, Chairman of GFI, commented: “The Gutsche family have been committed to The Coca-Cola Company business in Southern and East Africa for 85 years and are confident that Coca-Cola HBC are the right partners to take the CCBA business forward to successfully achieve the joint vision for the Coca-Cola system in Africa. The Gutsche family will remain invested in the Coca-Cola system, and Africa, through its shareholding in Coca-Cola HBC.”
Strategic rationale for the Acquisition
· Materially expands Coca-Cola HBC’s existing African presence, bringing together two leading bottlers in the continent. CCBA will add 14 African markets in addition to Coca-Cola HBC’s business in Nigeria since 1951 and Egypt since 2022. Following Completion, Coca-Cola HBC will represent two-thirds of Africa’s total Coca-Cola system volume[2] and cover over 50%[3] of the continent’s population, solidifying Coca-Cola HBC’s long-term commitment to Africa – a key driver of future growth. The Acquisition would result in pro forma 2024 volumes for the combined group of 4.0 billion unit cases, revenues of €14.1 billion and EBIT of €1.4 billion[4].
· Drives further diversification of Coca-Cola HBC’s geographic footprint, with increased exposure to high growth markets. CCBA’s markets have compelling demographics and macroeconomic prospects, including growing populations and economies. With over 60% of the population in CCBA’s markets aged under 30, these markets offer significant potential for consumer recruitment and growth in per capita consumption.
· Consistent with the pillars of Coca-Cola HBC’s growth strategy and vision of being the leading 24/7 beverage partner. CCBA is a leading player in the non-alcoholic ready-to-drink (NARTD) category across its key markets, with a winning portfolio of over 40 global and local brands. CCBA has a strong track record of performance, and has deep commitment to investing in talent, sustainability and the communities in which it operates.
· Clear opportunity to leverage Coca-Cola HBC’s expertise in emerging markets, to unlock further growth. Coca-Cola HBC has a proven track record of operating in Africa, with a long-term presence in Nigeria and the successful integration of Egypt, which adds to CCBA’s significant experience in the continent. The Acquisition creates a platform for Coca-Cola HBC to share best practices, roll-out its leading bespoke capabilities and invest further in CCBA, to drive growth.
· Further strengthens Coca-Cola HBC’s long-term strategic partnership with The Coca-Cola Company. TCCC and Coca-Cola HBC have been longstanding partners, and the Acquisition reflects a joint vision to continue to create value for all stakeholders for the long-term.
Financial effects of the Acquisition
· Expected to be low-single digit EPS accretive from the first full year following Completion.
· Leverage post Completion expected to be towards the top end of Coca-Cola HBC’s
medium-term target range of 1.5-2.0x Net debt to EBITDA, with no expected impact to credit rating and a clear commitment to sustainably maintaining a strong investment grade profile.
· Coca-Cola HBC’s existing capital allocation priorities remain unchanged, and as a result of the Acquisition, Coca-Cola HBC will cancel the share buyback programme with immediate effect.
Coca-Cola HBC is committed to Africa
· The Acquisition reflects Coca-Cola HBC’s aspiration to grow sustainably in Africa and create value for all stakeholders. Coca-Cola HBC is committed to serving local communities through local production and local distribution, and to work closely with local suppliers. At the heart of
Coca-Cola HBC’s success is the strength of its talented team, and it is dedicated to cultivating local talent by accelerating capability building to fuel growth. Consistently ranked as the world’s most sustainable beverage company by the Dow Jones Best-in-Class Indices, Coca-Cola HBC is one of the founding members, together with The Coca-Cola Company, CCBA and others, of
The Coca-Cola System’s Africa Water Stewardship Initiative. The system effort aims to invest nearly US$25 million by 2030 to support water solutions across 20 African countries.
· The combination of the two companies materially enhances Coca-Cola HBC’s presence in Africa. Coca-Cola HBC will underpin its commitment to the continent, including South Africa, through seeking a secondary listing of Coca-Cola HBC shares on the Johannesburg Stock Exchange (“JSE“) at or around Completion.
