Coca-Cola eyes US$8 billion value from Coca-Cola Beverages Africa public listing

SOUTH AFRICA – The Coca-Cola Company is gearing closer to finalizing plans of listing its largest bottler in Africa, Coca-Cola Beverages Africa (CCBA), as a publicly traded entity.

According to reports by Bloomberg, talks are ongoing and the final timing and size of the IPO will depend on the investors’ appetite and market conditions.

The soft beverage giant is seeking a value of R120 billion (US$8 billion) for Coca-Cola Beverages Africa when it lists the bottler in 2022, according to people familiar with the matter.

To facilitate the process, Coca-Cola is poised to appoint Bank of America, Morgan Stanley and Standard Bank Group to run the initial public offering (IPO), with more banks slated to be added to the roster in the coming weeks.

Coca-Cola holds 66.5% of Coca-Cola Beverages Africa, having paid US$3.15bn in 2016 to buy AB InBev out of the African bottling joint venture. The remaining 33.5% is held by the Gutsche Family Investments.

It tried to offload the stake a year later and drew interest from the likes of Heineken and Coca-Cola, reports said at the time.

In April, Coca-Cola revealed it was working with Rothschild & Company on an IPO of the business, with shares to be listed in Amsterdam and Johannesburg.

The decision is in line with The Coca-Cola Company’s objective of focusing its resources on building consumer-loved brands and innovation.

It also underscores the company’s continued and long-term belief and commitment to the African continent and the leadership of CCBA from South Africa.

The IPO will allow CCBA to operate as an independent, Africa-focused, South African-headquartered, managed and domiciled business.

CCBA is the 8th largest Coca-Cola bottling partner in the world by revenue, and the largest on the continent.

It accounts for 40 percent of all Coca-Cola products sold in Africa by volume. With over 16,000 employees in Africa, CCBA services millions of customers with a host of international and local brands.

Its African footprint now encompasses South Africa, Ghana, Ethiopia, Uganda, Kenya, Tanzania, Namibia, Mozambique, Comoros, Mayotte, Zambia, Botswana, Eswatini and Lesotho.

The listing announcement came months after CCBA’s subsidiary, Coca-Cola Beverages South Africa (CCBSA) transfered an additional 10% of shares to its employees, in a move aimed to enhance its black economic empowerment (BEE) status and meet its revised merger conditions.

Under the new plan, the 8,000 employees of the beverage maker who already held 5% of the private company now own 15%.

Adding to the company’s external BEE partners, the combined black-owned equity stake increased to 20%.

Companies in South Africa are required to meet the rules of a scheme called Black Economic Empowerment (BEE) which allows black employees and investors to hold equity in the company. This makes a company more likely to qualify for government tenders.

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