Soft drinks giant Coca-Cola has merged its non-alcoholic ready-to-drink beverages businesses in Southern and East Africa with SABMiller Plc and Gutsche Family Investments, the majority shareholders in Coca-Cola Sabco. The new bottler, Coca-Cola Beverages Africa, will serve 12 countries accounting for about 40% of all Coca-Cola beverage volumes in Africa.
Africa offers significant growth potential in beverages, according to the companies’ analysis, 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. This will also allow the new outfit to develop best operating practices and invest in production, sales and distribution, and marketing to benefit from growing demand and drive profitability.
“Coca-Cola Beverages Africa will be strongly positioned to offer consumers greater choice, broader availability and better value,” the management said in a statement. “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 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 Mr 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.”
He said soft drinks are an important element of the company’s growth strategy and the merger increases its access to the beverage market in Africa. “The opportunity is significant, with favourable demographics and economic development pointing to excellent growth prospects,” said Mr Alan Clark, SABMiller Chief Executive. “This also signifies a strengthening of our strategic relationship with The Coca-Cola Company.”
Mr 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.”
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 later include its Swaziland soft drinks business and those of its listed subsidiaries in Botswana and Zambia, subject to agreement with those subsidiaries and the requisite regulatory and shareholder approvals.
Phil Gutsche will be Chairman of Coca-Cola Beverages Africa which will be headquartered at Port Elizabeth, South Africa.
As part of the transaction, The Coca-Cola Company will also acquire SABMiller’s Appletiser brands globally, and acquire or be licensed rights to a further 19 non-alcoholic ready-to-drink brands in Africa and in Latin America, for $260m. SABMiller will retain ownership of its non-alcoholic malt beverages in Africa and Latin America and will retain its Coca-Cola franchises in El Salvador and Honduras.
