Coca-Cola bottling mega-deal will lead to JSE listing

There was a major development in the world of Coca-Cola on Tuesday - the Coca-Cola Company and SA-based Gutsche Family Investments announced that they've agreed to sell a 75% controlling interest in Coca-Cola Beverages Africa (CCBA) to Coca-Cola HBC AG.

CCBA is the largest bottler for Coca-Cola in Africa, accounting for about 40% of all Coca-Cola product volume sold across the continent.

And Coca-Cola HBC is one of the largest bottlers in the world, with operations in 29 countries across Europe and Africa, including Nigeria and Egypt.

After the sale, the Gutsche family will continue its involvement in both the Coca-Cola system and Africa through its ownership stake in Coca-Cola HBC.

In total, the transaction values 100% of CCBA at an equity value of US$3.4 billion.
The transactions are targeted to close by the end of 2026.

Coca-Cola and Coca-Cola HBC have also agreed to a separate option agreement for Coca-Cola HBC to acquire the remaining 25% of CCBA still owned by Coca-Cola within a six-year period from closing.

As part of the acquisition, Coca-Cola HBC will pursue a secondary listing on the Johannesburg Stock Exchange (JSE), which it says underpins its 'commitment to South Africa and the African continent'.

Veteran stockbroker David Shapiro sees this as a positive development.

While this will be a secondary listing, it is important because it will allow South African participants - or anybody around the world, to buy these shares, notes the chief global equity strategist at Sasfin Securities.

"I think the reason they're doing this is because of the extent of the operations in Africa... because of the extent they want to spread ownership and give Africans the chance."

To hear more of Shapiro's take, listen to the interview audio at the top of the article