Coca-Cola considers options for $6bn Africa unit

Coca-Cola Co is weighing options for its bottling business in Africa, including a sale or initial public offering, according to people familiar with the matter.

The soft drinks giant holds 66.5percent of Coca-Cola Beverages Africa and is speaking with potential advisers about its exit options, the people said, asking not to be named as the details aren’t public. A sale or IPO of the stake could value the African business at about $6 billion, the people said. This could change depending on the level of buyer interest, the people said.

Deliberations are ongoing and there’s no certainty they’ll lead to a sale or IPO, according to the people. A representative for the African business referred queries to Coca-Cola, which declined to comment.

Coca-Cola initially tried to offload the stake in 2017, when it drew interest from the likes of Heineken and CocaCola HBC, Bloomberg News reported at the time. It had acquired the majority holding less than a year earlier, when it paid $3.15 billion to buy AnheuserBusch InBev out of the African bottling joint venture. The Coca-Cola Beverages Africa business serves 13 countries, including Kenya, Ethiopia and Ghana, according to its website. It accounts for about 40percent of the Atlanta-based company’s drinks sold on the continent. Coca-Cola concluded a deal earlier this year to increase local shareholding in its South Africa bottling unit. A year of global Covid-19 lockdowns at restaurants, amusement parks and stadiums have disrupted Coca-Cola’s global businesses.

Organic sales fell 3percent in the quarter ended December 31 amid ongoing challenges from the pandemic. Still, the drop was less severe than analyst forecasts and Coca-Cola has predicted high-single digit revenue growth for 2021 as more of the world’s population gets vaccinated.