South Africa Approves Formation Of Africa’s Biggest Coke Drinks Bottler


South Africa’s Competition Tribunal has conditionally approved the formation of Coca-cola Beverage Africa, essentially creating Africa’s largest soft drinks bottler spanning 12 countries and about 40 percent of Coke’s soft-drink volumes on the continent.

The deal, which was launched in November 2014, involves a merger between Coca-cola and SABMiller.

Last week, SABMiller and Coca Cola agreed to a  $53 million deal with the South African government that will see the new company retain the same level of jobs for the next three years after the merger.

SABMiller will hold 57 percent of newly created Coca-Cola Beverages Africa and Coke will own 11.3 percent, while the rest will be privately owned by the Gutsche Family Investments.

“Today’s announcement ensures that the creation of Coca-Cola’s largest bottling partner in Africa will strengthen our business while also closely aligning with the South African government’s national imperatives for social and economic development,” Coca-Cola Chief Operating Officer James Quincey said in a statement.

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It is estimated that Coca Cola Beverages Africa will have an annual sale of about $2.9 billion. The company will operate in South Africa, Kenya, Ethiopia, Mozambique, Tanzania, Uganda, Namibia, Mayotte, Comoros, Botswana, Swaziland and Zambia.

The merger still faces regulatory approval in other African countries where it will operate.

“To date, the regulatory authorities in Namibia and Comesa have unconditionally approved the transaction. The authorities in Kenya, Tanzania and South Africa have approved the transactions with some conditions,” Coca Cola said.

The approval of the Coke-SABMiller deal points to a likelihood of another deal between AB InBev and SABMiller getting approved, Reuters reported.

In mid April, AB InBev, which plans to merge with SABMiller to form one of the largest beer companies in the world, agreed to an involuntary job loss deal with the South African government as it seek an approval to its deal.

SABMiller employs more than 9,000 workers in South Africa.



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