Coca-Cola Operations Combine in Africa

The Coca-Cola Company (NYSE:KO), SABMiller plc (LSE:SAB) (JSE:SABJ) and Gutsche Family Investments (GFI, majority shareholders in Coca-Cola Sabco) have agreed to combine the bottling operations of their non-alcoholic ready-to-drink beverages businesses in Southern and East Africa. 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.

Africa offers significant growth potential in beverages, underpinned by rising personal disposable income, a fast-growing population and increasing per capita consumption. With more than 30 bottling plants and over 14,000 employees, Coca-Cola Beverages Africa will be the largest Coca-Cola bottler on the continent, with the scale, complementary capabilities and resources to capture and accelerate top-line growth. This will also allow the new African bottler to develop best operating practices and invest in production, sales and distribution, and marketing to benefit from growing demand and drive profitability.

With a shared vision, extensive experience of operating in African markets, and long-term commitment to the continent, Coca-Cola Beverages Africa will be strongly positioned to offer consumers greater choice, broader availability and better value. The new bottler will continue the shareholders’ strong commitment to the economic and social development of the communities it serves, which includes providing access to clean water, supporting women’s economic empowerment and promoting wellbeing.

On full completion of the proposed merger, shareholdings in Coca-Cola Beverages Africa will be SABMiller: 57.0%, Gutsche Family Investments: 31.7% and The Coca-Cola Company: 11.3%.

“A combined Coca-Cola bottling operation is further evidence of our commitment to Africa, and our firm belief in the tremendous growth prospects that the continent offers,” said Muhtar Kent, Chairman and CEO of The Coca-Cola Company. “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.”

“Soft drinks are an important element of our growth strategy. This transaction increases our exposure to the total beverage market in Africa. 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.”

Phil Gutsche, Chairman of Gutsche Family Investments (GFI), said, “Our family sees this 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 about the opportunity and are totally committed to ensuring that Coca-Cola Sabco’s distinctive culture is successfully integrated with that of our new partners in order to create an even more successful business in the future.”