Bottling operations combined

SABMILLER Plc, The Coca-Cola Company and Gutsche Family Investments (GFI) are combining their soft drinks bottling operations in South and East Africa to create a group with $2.9-billion (R31.8-billion) in revenue across 12 fastgrowing markets.

The new company, with its headquarters in South Africa, will be 57% owned by the brewer, 31.7% by GFI, the majority owner of South Africa-based bottler CocaCola Sabco, and 11.3% owned by The CocaCola Company, the groups said yesterday.

As part of the deal, Coca-Cola will also acquire SABMiller’s sparkling soft drink Appletiser brands globally, and buy or be licensed for a further 19 non-alcoholic names in Africa and Latin America for about $260-million (R2.85-billion).

“The opportunity is significant, with favourable demographics and economic development pointing to excellent growth prospects,” said Alan Clark, SABMiller chief executive.

“This also signifies a strengthening of our strategic relationship with The Coca-Cola Company.”

Households in fast-growing African economies are finding themselves with much more disposable income, which they are spending on what previously would have been considered luxuries.

Management consultancy McKinsey says that Africa’s consumer spending on shopping, banking, telecoms and tourism could grow to $978-billion (R10.7trillion) by 2020, from $570-billion (R6.25 trillion) in 2010.

The new firm, Coca-Cola Beverages Africa, will have more than 30 bottling plants when the deal is completed, bringing together brands such as Appletiser and spring water Valpre in countries such as South Africa, Kenya, Ethiopia, Mozambique and Tanzania.

Others are Uganda, Namibia, Comoros and Mayotte. At a later date, operations in Swaziland, Botswana and Zambia will be included in the transaction.

Nomura and NLA advised Coca-Cola Sabco and Rothschild advised SAB Miller on the deal. — Reuters