Anheuser-Busch InBev has sold its equity stake in Coca Cola Beverages Africa to Coca Cola at a price of $3.15 billion, Equities Focus reports.
It further eports that the deal to sell the 54.5% stake was agreed upon last year in December and will see the operations of Coca Cola Beverages Africa in countries such as Comoros, Mayotte, Ghana, Mozambique, Ethiopia, Tanzania, Uganda, Kenya, Namibia and South Africa sold to the Atlanta, Georgia-based beverages giant. These operations represent about 40% of the combined beverage volumes of Coca Cola on the African continent.
At the moment Coca Cola Beverages Africa, which was formed last year, is the biggest bottler of Coca Cola products in Africa. The bottler was formed after the SABMiller’s ready-to-drink non-alcohol interests were merged with those of Gutsche Family Investments and Coca Cola Company. In 2016 SABMiller was acquired by AB InBev at a price of $104 billion.
With the deal having been concluded Coca Cola’s expansion in Africa will be greatly enhanced. Once the acquisition is completed Coca Cola’s stake will be a controlling one. Coca Cola Beverages Africa has however indicated that these businesses will be temporarily remain as they are until a suitable refranchising partner is found. Consequently these assets will in the time being be accounted for as discontinued operations.
However, Coca Cola Beverages Africa had reached an agreement with the government of South Africa as well as the competition authorities. The agreement involved committing the organization to remaining a tax resident in Africa’s biggest economy as well as remaining incorporated there.
At the same time Coca Cola and AB InBev are about to finalize a deal aimed at selling the latter’s stake in bottling businesses that are located in Honduras, El Salvador, Lesotho, Swaziland, Botswana, Zambia and Zimbabwe to the former. However the transactions have yet to the get the approval of the shareholders and the regulators.
The purchase of Anheuser-Busch InBev’s equity stake in Coca Cola Beverages Africa by Coca Cola comes in the wake of the beverages giant announcing the acquisition of Topo Chico, a sparkling water label firm based in Monterrey, Mexico at a price of $220 million. Topo Chico’s products are not restricted to Mexico but are also available in some states in the U.S. such as Texas where they have proved to be popular. Approximately 70% of the revenues of the sparkling water firm which was founded in 1895 are derived from Texas.