Coca-Cola HBC Set to Acquire Coca-Cola Beverages Africa

Coca-Cola HBC (LON: CCH) has announced a definitive agreement to acquire a 75% stake in Coca-Cola Beverages Africa (CCBA) from The Coca-Cola Company (TCCC) and Gutsche Family Investments (GFI) for $2.6 billion, in a move poised to reshape the beverage landscape in Africa.

The deal, targeted for completion by the end of 2026, subject to regulatory approvals and shareholder consent, will establish Coca-Cola HBC as the second-largest Coca-Cola bottling partner globally by volume, with dominant positions across both Africa and Europe.

The acquisition materially expands Coca-Cola HBC's footprint in Africa, adding 14 markets where CCBA operates, representing approximately 40% of the Coca-Cola system's volume on the continent.

This builds upon Coca-Cola HBC's existing presence in Nigeria (since 1951) and Egypt (since 2022). Post-acquisition, Coca-Cola HBC will represent two-thirds of Africa's total Coca-Cola system volume and cover over 50% of the continent's population, solidifying its long-term commitment to the high-growth African market.

Combined, the pro forma 2024 figures for the integrated group show an impressive scale: 4.0 billion unit cases in volume, €14.1 billion in revenues, and €1.4 billion in EBIT.

The transaction is expected to be low-single digit EPS accretive from the first full year following completion, enhancing shareholder value. To further demonstrate its commitment to the African continent, Coca-Cola HBC intends to pursue a secondary listing on the Johannesburg Stock Exchange (JSE).

Notably, Coca-Cola HBC will fund the acquisition through new bridge financing facilities covering the cash consideration and the issuance of new shares to GFI, representing 5.47% of Coca-Cola HBC's enlarged share capital.

Furthermore, Coca-Cola HBC and TCCC have agreed to an option agreement, potentially allowing Coca-Cola HBC to acquire the remaining 25% equity interest in CCBA still held by TCCC.

Anastassis G. David, Chairman of the Board of Coca-Cola HBC, stated, “This milestone marks a historic moment for Coca-Cola HBC and continues our legacy of growth and partnership across Africa…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.”

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…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.”