SOUTH AFRICA: Fortune shines on Coca Cola merger
A merger between two Coca Cola bottling, distribution and marketing companies will create the second biggest Coke company in South Africa.
Coca Cola South African Bottling Company (SABCO) and Fortune Beverages have announced their intention to join forces, which will result in the new entity having a 23% share of the domestic market, with a particular emphasis on distribution to rural areas in several provinces.
SABCO, an unlisted company, had about 18% of Coca Cola's national market share, while Fortune Beverages had just under 5%. It will now be second to South African Breweries subsidiary, Amalgamated Beverage Industries which has a 65% share.
The new company will be known as Coca Cola Fortune and will have its head office in Port Elizabeth.
The value of Fortune's shares more than doubled from 145c to 325c when the announcement was made. SABCO, which operates in six provinces, will hold 81% of the shares and Fortune, with plants in two provinces will hold the remaining 19%.
Finalisation of the deal was dependent on approval by the company's shareholders, the JSE and Securities Regulation Panel, the South African competition authorities, and the Coca Cola Company.
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