Coca-Cola buys into Delta

HARARE - American carbonated soft drink producer, Coca-Cola Company, has agreed to buy Anheuser-Busch InBev SA’s 54,5 percent stake in Coca-Cola Beverages Africa (CCBA) for $3,15 billion.

CCBA — Africa’s largest bottling firm —was formed by Coca-Cola along with SABMiller and the South African owners of bottler Coca-Cola Sabco in 2014.

The company is based in South Africa and has operations — including more than 30 bottling plants — in 10 countries across southern and eastern Africa.

Economic analysts said the Atlanta-based company, which retained the right to buy SABMiller’s stake in the event of a change of control at the brewer, wants to keep AB InBev at arm’s length following speculation that it could become a future takeover target for the beer giant.

AB InBev is also a major bottler of non-alcoholic drinks in Latin America for PepsiCo Incorporation, Coca-Cola’s long-time rival.

For AB InBev, the deal represents its latest asset sale since its $100 billion-plus takeover of rival SABMiller, for which it won regulatory approval a few months ago.

Coca-Cola and InBev also announced yesterday that they had reached an agreement for the soft-drinks company to separately buy the brewer’s interest in bottling operations Zambia, Zimbabwe, Botswana, Swaziland, Lesotho, El Salvador and Honduras for an undisclosed amount.

The American conglomerate also plans to refranchise those operations and expects both deals with AB InBev to close by the end of 2017.

Coca-Cola chief executive Muhtar Kent said the company was in talks with a number of parties who are interested in the bottling businesses and would seek to refranchise the operations as soon as it gets greenlight from relevant authorities.

“We will move forward with our long-term strategic plan in these important growth markets. We are continuing negotiations with a number of parties who are highly qualified and interested in these bottling territories and look forward to refranchising these territories as soon as practical— following regulatory approval,” he said.

The United States drinks maker has been divesting manufacturing and distribution assets world-wide, as part of an “asset light” strategy to focus on its more profitable concentrate business as soda consumption is slowing.

AB InBev chief executive Carlos Brito said his company was “happy that we have been able to reach this agreement with The Coca-Cola Company in a timely manner and with a satisfactory outcome for all parties”.

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