NIGERIA – Coca-Cola, the world’s leader in soft beverages, has bought an initial 40% shareholding in Nigeria’s Chi Limited, the leading dairy and beverages producer in the country and the West Africa region.
Chi Limited is majority owned by the holding company TGI Group and produces such household brands as Hollandia and Chivita and employs a team of over 1,400 people in Nigeria. The deal’s value has not been disclosed.
Chi Ltd, incorporated in 1982, is the producer of popular value-added dairy and juice beverages, ice tea and snacks. A European family, according to industry sources quoted by Reuters, owns the unlisted TGI Group.
“Coca-Cola and Chi share the same commitment to Africa, to investing in our operations and to continuous innovation and our relationship will allow us to continue to provide Nigerian consumers the number one beverage in each of the categories we serve.
We’re extremely excited by the opportunity to work together and to continue serving Nigeria’s growing population by offering more choice and availability,” said Nathan Kalumbu, President of Coca-Cola Eurasia and Africa, said
The dairy and beverage product lines are some of the fastest growing categories not just in Nigeria but also throughout Africa, notes Coca-Cola in a statement.
The initial deal will see Coca-Cola making a minority equity investment in Chi Limited and both companies plan to expand their relationship over coming years as they learn from each other’s experience and expertise with their complementary beverage portfolios.
“The agreement will allow both companies to leverage their respective investments and expertise to further drive innovation as well as increasing the availability of their products and the choice they can offer consumers,” says Coca-Cola.
Sources note that Coca-Cola has an opportunity to take a 100% shareholding after a few years, subject to regulatory approval.
Both parties have agreed to jointly discuss and explore other opportunities in the region to further develop their new relationship, opening the opportunity for Coca-Cola to grow its footprint in the important African market, where the company announced in 2014 that it plans to spend an expanded US$17 billion in the 10 years to 2020.
The company has been present in Africa since 1928.
The two firms both have deep roots in Nigeria and have been serving Nigerian consumers for a combined 100 years while supporting an extensive supply-chain of local customers, retailers and suppliers, notes Coca-Cola.
Nigeria is home to more than 170 million people, the largest population in Africa, more than 60 percent of whom are under the age of 25.
The country also boasts the African continent’s largest economy that continues to show strong economic growth potential, despite recent setbacks brought to the economy due to the fall in oil prices, on which Nigeria relies to drive its economy.