CCBA to acquire stakes in Kenya’s Coca-Cola franchises

Coca-Cola Beverages Africa (CCBA) is set to acquire stakes in two of Kenya’s Coca-Cola franchises. Centum Investments, a quasi-Kenya Government agency announced on Wednesday it has agreed to sell its 53.9% and 27.6% stakes held in Almasi Beverages Limited and Nairobi Bottlers Limited to Coca-Cola Sabco East Africa, the South African co-owner of CCBA at a cost of 19.5bn Kenyan shillings ($192.5m).

The transaction which is expected to close in the next four months will see CCBA take 100% ownership of Nairobi Bottlers Limited from 72.4% stake it held before the announcement.

“The completion of the acquisition by CCBA of majority stake in Almasi Beverages Limited from Centum is subject to various conditions, inter alia, regulatory approvals from Competition Authority of Kenya,” Centum CEO James Mworia said in a notice to shareholders.

CCBA has been consolidating its holdings in the Southern and East African markets. In 2017, it took control of Kisumu, Kenya-based Equator Bottlers in Western Kenya. In December 2018, it acquired Zambia Breweries’ owned Kalundu Beverages Limited, trading as Coca-Cola Beverages Zambia. This was followed by the acquisition of Fairy Bottling Zambia Limited, a maker of Super Maheu (fermented maize beverage), Aqua Savana and other soft drinks trademarks in February 2019.

The Coca-Cola Company announced in May it would retain its majority stake in Coca-Cola Beverages Africa (CCBA) as talks to find a bottling partner(s) hit a dead end. The soft drinks giant combined stake in CCBA was about 65.8%. This is after acquiring stakes formerly held by SABMiller’s in the joint-venture. CCBA was initially formed in November 2014 but did not pass all regulatory hurdles until July 2016.

The distribution of the shares in the original joint-venture was SABMiller 57%, The Coca-Cola Company 11.3% and Gutsch Family Investments, owners of Coca-Cola Sabco, a South African bottling company 31.7%.

The soft drinks giant had wanted to refranchise its bottling operations as part of a global push to unload its capital intensive manufacturing and distribution operations to focus on its main beverage business and improve margins.

Coca-Cola in 2016 acquired the 54.5% stake in CCBA formerly held by SABMiller from AB InBev following the merger of AB InBev and SABMiller. At the time, Coke said it would hold onto the stake temporarily until it found a suitable bottling partner.

In May it announced it could not reach a deal with potential bottling partners and decided to hold onto the stake for now. Some of the potential bottling partners included Coca-Cola HBC, Cola-Cola European Partners, Coca-Cola Sabco and Heineken N.V.

The company said it would reclassify CCBA holding in its financial statement from the second quarter of 2019 to ‘Continued Operations’, from ‘Discontinued Operations’.

Leave a Reply

Your email address will not be published. Required fields are marked *