Coca-Cola HBC AG said it has agreed to acquire 94.7% of Coca-Cola Bottling Company of Egypt (CCBCE) in a deal worth US$427mln.
The soft drinks bottle said it will buy 52.7% of the group from one of its major shareholders, MAC Beverages, for US$304mln in cash, while another 42% stake will be purchased from The Coca-Cola Company (NYSE:KO) for US$123mln. The transaction is expected to complete between the fourth quarter of 2021 and the first quarter of 2022.
The company said the deal will provide access to the second-largest market for non-alcoholic ready to drink (NARTD) beverages in African by volume and will provide a “significant opportunity” to leverage its capabilities and expand its exposure to high-growth geographies.
Coca-Cola HBC added that “low-single digit” earnings per share accretion is expected in the near term following the purchase, and that it will be able to create further value by raising CCBCE’s margins to the group average over time.
“We are excited to welcome CCBCE to our group. We see great potential for this business to unlock considerable opportunities in the NARTD category in Egypt. With our best-in-class execution capabilities, commercial expertise and world leading approach to sustainability and communities, we believe there is a significant opportunity to create value for all stakeholders. We appreciate the trust placed in us by The Coca-Cola Company and MBL, and look forward to becoming part of the Coca-Cola system in Egypt”, chief executive Zoran Bogdanovic said in a statement.
Volumes expand in first half
News of the acquisition followed the company’s results for its first half, in which it reported that its volumes had grown by 13.8% to 1,12bn unit cases in the six months to July 2.
Operating profit, meanwhile, soared 72.5% to EUR350.1mln as net sales revenue jumped 14.7% to EUR3.25bn.
The strong performance was attributed to an ongoing recovery in the group’s business as well as value share gains in the second quarter.
As a result, the firm said it expected to achieve a 20 to 30 basis point improvement in its margins in the full year.
Shares in Coca-Cola HBC were 2.1% lower at 2,661p in late afternoon deals on Thursday.