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Coca-Cola’s Africa bottler heading to the JSE

The Coca-Cola Company will list its bottling unit in Amsterdam and on the JSE, a move that will hand investors ownership in Africa’s largest bottler of non-alcoholic products.

Coca-Cola Beverages Africa (CCBA), which packages 40% of Coca-Cola products sold on the continent and employs 16,000 people, became majority-owned by the Atlanta-based company in 2016 after AB InBev sold its stake following the brewer’s takeover of SABMiller.

Coca-Cola rarely owns its bottlers around the world, rather owning world-famous drink brands and outsources their bottling.

The multinational, present in 200 markets, said its decision to sell its 66.5% shareholding in CCBA would allow it to focus on its main beverage business.

For investors in Johannesburg, the initial public offering is likely to boost the ranks of blue chip consumer industry stocks dominated by Shoprite, Tiger Brands and Woolworths.

Standalone operator

Coca-Cola said the separate listing will ensure the bottler is an independent African-focused business that is headquartered, managed and domiciled in SA.

“A standalone listing for CCBA will enable the bottler to build on its growth trajectory and access capital independently to meet the investment needs of the business, which is great for stakeholders across Africa,” said Jacques Vermeulen, CEO of CCBA.

The initial public offering will take place within 18 months.

Coca-Cola said the separation underscores its long-term belief and commitment to Africa and CCBA’s leadership.

CCBA was formed in 2016 through the merger of The Coca-Cola Company, SABMiller plc and Gutsche Family Investments. CCBA shareholders at present are The Coca-Cola Company, which owns 66.5%, and Gutsche Family Investments, which holds 33.5%.

Retail analyst Syd Vianello said little is known about the Gutsche family. “The listing could catapult them to one of the country’s top five wealthiest families.”

The family has been bottling Coke out of the public eye for 75-80 years. The family also owns Woodlands Dairy, a big producer of long-life milk, and has extensive property interests.

“No-one knows what they are worth,” Vianello said.

CCBA has operations in SA, Ghana, Ethiopia, Uganda, Kenya, Tanzania, Namibia, Mozambique, Comoros, Mayotte (a region and department of France), Zambia, Botswana, Eswatini and Lesotho.

When approving the merger between SABMiller and AB InBev, the Competition Tribunal enacted strict conditions. CCBA had to retain the same number of employees for three years, limit retrenchments and invest R800m in developing entrepreneur businesses.

CCBA is accused by the Competition Commission of breaching its merger conditions after it retrenched 368 workers in 2019, three years after the merger. CCBA has said the retrenchments were because the sugar tax dented its profits by R300m in 2018.


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