GLOBAL MONITOR-Coca Cola, SABMiller, and Gutsche Family Investments (GFI) have announced a merger of their South and East African ventures to create a bottling group, Coca-Cola Beverages Africa. The new company will subsume businesses with a combined revenue of $2.9 billion across 12 fast-growing markets.
It will be 57 percent owned by SABMiller, 31.7 percent by GFI, and 11.3 percent by The Coca-Cola Company, the groups said on Thursday. SABMiller is a major bottler for Coca-Cola, while GFI is the majority owner of South Africa-based bottler Coca-Cola Sabco.
The new company will be headquartered in South Africa.
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.According to Reuters, 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, Tanzania, Uganda, Namibia, Comoros and Mayotte. Operations in Swaziland, Botswana and Zambia will be included in the transaction at a later date, the news agency reported.“The opportunity is significant, with favourable demographics and economic development pointing to excellent growth prospects,” said Alan Clark, SABMiller Chief Executive, quoted by Reuters. “This also signifies a strengthening of our strategic relationship with The Coca-Cola Company.”
With the rise in disposable income among households in fast-growing African economies, analysts say spending is increasing on what previously would have been considered luxuries. McKinsey says that Africa’s consumer spending on shopping, banking, telecoms and tourism could grow to $978 billion by 2020, from $570 billion in 2010.