Yesterday, SABMiller, The Coca-Cola Co and Gutsche Family Investments – the owner of Coca-Cola Sabco – announced their intention to combine their bottling operations in east and southern Africa. Here, we take a look at the finer detail of the arrangement.
- SABMiller will contribute its South African Coca-Cola bottler, Amalgamated Beverage Industries, and its other sub-Saharan bottling operations in Zambia, Lesotho, Botswana, Swaziland, Mayotte & the Comoros. The company will also contribute its water businesses in Ethiopia, Kenya, Nigeria and Uganda
- The Coca-Cola bottling assets of Delta, SABMiller’s associate in Zimbabwe, will not be included in the new entity. Nor will Castel’s bottling assets – In 2001, SABMiller acquired 20% of Castel’s African Beverages operations and Castel acquired 38% of SABMiller Africa and SABMiller Botswana. Two years ago, the two combined their Nigerian businesses under SABMiller’s control with their Angolan businesses going to Castel. SABMiller will also retain its soft drinks operations in Latin America, specifically in El Salvador and Honduras
- The Coca-Cola Co will acquire global control of Appletiser and 19 other brands from SABMiller for US$260m
- Coca Cola Co will contribute Coca-Cola Shanduka Beverages, the fourth largest bottler in South Africa, as well as Coca-Cola Canners and its Valpré South African water unit
- Sabco will contribute Coca-Cola Fortune, the number two Coca-Cola bottler in South Africa, as well as its Coca-Cola bottlers in Ethiopia, Kenya, Mozambique, Namibia, Tanzania and Uganda. The company’s Coca-Cola operations in Sri Lanka and Nepal remain separate
- With a presence in 12 countries, Coca-Cola Beverages Africa will become the continent’s largest bottler and the tenth largest Coca-Cola bottler globally. It will account for around 40% of all Coca-Cola beverage volumes in the continent
- It will initially handle production and distribution in South Africa, Kenya, Ethiopia, Mozambique, Tanzania, Uganda, Namibia, Comoros and Mayotte
- Phil Gutsche will be chairman, with Port Elizabeth in South Africa set to house the company’s headquarters. Coca-Cola Sabco is also based in Port Elizabeth
- SABMiller will hold a 57% economic stake and 50% voting rights, with the Gutsche family holding a 32% economic stake and 35% voting rights. Coca-Cola Co will have an 11% economic stake and 15% voting rights
- The board will be made up of five SABMiller representatives, three from Gutsche Family Investments and two from Coca-Cola Co. SABMiller will carry a casting vote
- Coca-Cola Beverages Africa’s results will be consolidated into SABMiller’s financial statements. Coca-Cola Co will equity account for its stake in Coca-Cola Beverages Africa
- The approval process for the transaction is expected to take between six and nine months
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