Coca-Cola HBC AG (LSE:CCH) has struck a deal to acquire 75% of the largest Coca-Cola bottler in Africa for $2.6 billion (£1.94bn) to make it the second-largest drinks bottler in the world.
Coca-Cola Beverages Africa (CCBA), currently owned by The Coca-Cola Company (NYSE:KO) and the South Africa-based Gutsche family, operates in 14 African countries, producing around 40% of the continent’s sales volumes of the US soft drink giant.
The acquisition expands FTSE 100-listed HBC’s footprint in the continent, which currently includes Nigeria and Egypt.
Earnings per share are expected to benefit from a "low single-digit" accretion from the first full year after completion, which is targeted by the end of 2026, subject to shareholder and regulatory approvals.
Coca-Cola Hellenic said it will fund the acquisition through a combination of bridge financing and issuing new shares, with a secondary listing on the Johannesburg Stock Exchange planned to support its long-term commitment to Africa. The share element of the purchase represents 5.47% of Coca-Cola HBC's outstanding share capital.
Coca-Cola and Coca-Cola HBC have also agreed to a separate option agreement for the remaining 25% of CCBA still owned by Coca-Cola to be sold within a six-year period from this deal closing.
Chairman Anastassis G David said: "This milestone marks a historic moment for Coca-Cola HBC and continues our legacy of growth and partnership across Africa."
CEO Zoran Bogdanovic said: "Having established our business in Nigeria nearly 75 years ago and with our successful acquisition and integration of the Egypt business three years ago, we have a deep understanding of the compelling proposition Africa presents. It has a sizable and growing consumer base, and there are significant opportunities to increase per capita consumption."
CCH also pre-released third-quarter organic sales numbers, showing 5% growth, which was below consensus expectations of around 6.3%.
Both volume and price/mix were lower than expected, due to a combination of less favourable weather trends, a tougher consumer backdrop and moderating inflationary pricing.
Bogdanovic said organic revenue growth of 8.1% over the first nine months of the year "highlights the strength of our portfolio and our ability to drive growth in volume, revenue-per-case and market share, even in mixed markets".
He reaffirmed the financial outlook for the year ahead, with the current year expected to see organic revenue growth at the top end of a 6-8% range, with organic EBIT growth at the top end of a 7-11% range.;