Coca-Cola, SABMiller partner to create biggest bottler in Africa

Coca-Cola Company has announced a partnership to form its largest soft drinks bottling company in Africa, serving “high growth” countries on the continent.

The company will together with British drinks giant SABMiller and Gutsche Family Investment (GFI), a South Africa private firm, join forces to create a group with $2.9 billion in revenue across 12 fast-growing markets. “The new bottler, Coca-Cola Beverages Africa, will serve 12 high-growth countries accounting for approximately 40 per cent of all Coca-Cola beverage volumes in Africa,” said a statement.

The new company would be majority-owned by SABMiller with a 57 per cent stake, Gutsche Family Investments with 31.7 per cent and The Coca-Cola Company with 11.3 per cent, according to the companies. The deal is underpinned by “rising personal disposable income” and increased consumption per capita.

Coca-Cola Beverages Africa will initially produce and distribute Coca-Cola beverages in nine countries: South Africa, Kenya, Ethiopia, Mozambique, Tanzania, Uganda, Namibia, Comoros and Mayotte.

SABMiller intends to include at a later date its Swaziland soft drinks business and those of its listed subsidiaries in Botswana and Zambia, subject to agreement in due course with those subsidiaries and the requisite regulatory and shareholder approvals.

 As part of the deal, Coca-Cola will acquire SABMiller’s Appletiser soft drinks and 19 other non-alcoholic brands in Africa and Latin America for nearly $260 million.

Growth prospects

“The opportunity is significant, with favourable demographics and economic development pointing to excellent growth prospects,” said Alan Clark, SABMiller Chief Executive. “This also signifies a strengthening of our strategic relationship with The Coca-Cola Company.”

Chairman and CEO of the Coca-Cola Company Muhtar Kent said a combined Coca-Cola bottling operation is further evidence of its commitment to Africa, and firm belief in the “tremendous growth prospects that the continent offers.” “As one of the top 10 largest Coca-Cola bottling partners worldwide, Coca-Cola Beverages Africa can leverage the scale, resources, capability and efficiency needed to accelerate Coca-Cola growth and contribute to the economic and social prosperity of African communities,” he said.

Phil Gutsche, Chairman of Gutsche Family Investments said the family sees the merger as an important and logical step to enable Coca-Cola Beverages Africa to optimise the opportunities for development in the rapidly-evolving Africa beverage market.

“We are very excited and are totally committed to ensuring Coca-Cola Sabco’s distinctive culture is successfully integrated with that of our new partners,” he added.