Coca-Cola Beverages Africa to show its fizz in listing in Joburg and Amsterdam

The Coca-Cola Company unveils plans to sell shareholding in CCBA through initial public offering

THE COCA-COLA Company has unveiled plans to sell its shareholding in Coca-Cola Beverages Africa (CCBA) through an initial public offering (IPO) that will see shares traded on the JSE and Amsterdam.

The company said the group had not yet taken a decision on the quantum of the stake, and would work with CCBA on the IPO process over the next 18 months.

The IPO was expected to pave the way for CCBA, Africa’s biggest bottling company, to operate as an independent Africa-focused, South African-headquartered, managed and domiciled business. Speaking during The Coca-Cola Company’s 2020 first quarter earnings webcast yesterday, chief executive James Quincey said it had always been the group’s intention to reduce its interest in CCBA in line with its strategy to operate as a global brand owner with independent bottling partners.

“CCBA is a strong and well capable bottler. We have always considered having it as a free-standing entity,” Quincey said. Quincey also said that given Africa’s young population, an African headquartered bottler made sense.

“We believe in the future of the continent and we think in CCBA we have a bottler that will grow into that future,” said Quincey.

The IPO’s exact timing would likely be driven by a number of factors, including macroeconomic conditions. Shares would be listed in Amsterdam and Joburg, with Amsterdam being the primary exchange, The Coca-Cola Company said.

“The Coca-Cola Company sees Africa as a key growth market and views a separate listing of CCBA as an opportunity to deliver a broad, supportive, long-term investor base for the ongoing development of the business,” said Bruno Pietracci, president of the Africa operating unit of The Coca-Cola Company. The company also said the plans underscored its continued and long-term belief and commitment to the African continent and leadership of CCBA from South Africa.

“A standalone listing for CCBA will enable the bottler to build on its growth trajectory and access capital independently to meet the investment needs of the business, which is great for stakeholders across Africa,” said CCBA chief executive, Jacques Vermeulen.

CCBA is the biggest bottler of The Coca-Cola Company products on the continent with a footprint covering South Africa, Ghana, Ethiopia, Uganda, Kenya, Tanzania, Namibia, Mozambique, Eswatini, Comoros, Mayotte and Lesotho.

CCBA, which was formed in 2016, is 66.5 percent owned by The CocaCola

Company, the New York-listed beverages giant, while the Gutsche Family Investments owns the 33.5 percent difference.

The bottler was formed after the SABMiller’s ready-to-drink non-alcohol interests were merged with those of the Gutsche Family Investments and The Coca-Cola Company.

In 2016 SABMiller was acquired by AB InBev at a price of $104 billion (R1.48 trillion). At the time, CCBA had reached an agreement with the government of South Africa as well as the competition authorities in which it committed to remaining a tax resident in South Africa which was at the time Africa’s biggest economy as well as remaining incorporated there.