Coca-Cola could aim for €7bn ($8.1bn) when it lists its African bottling operations with an initial public offering (IPO) of shares before listing on Euronext Amsterdam, with a secondary listing on the Johannesburg Stock Exchange.
Coca Cola Co., based in Atlanta USA, owns 66.5% of Coca-Cola Beverages Africa (CCBA), after buying out Annheuser-Busch InBev’s share for $3.15 bn in 2016. The other shareholder in CCBA is South Africa’s Gutsche Family Investments, led by Philipp Gutsche.
In January 2022 Coca-Cola held a virtual capital markets day to keep investors enthusiastic. The agenda was to describe Africa’s unique growth opportunity, given Coca Cola’s strong record of profitable growth in hard currency and attractive reasons to believe growth can continue over the long term. A company invitation said: “Over recent years, CCBA outperformed all the listed Coca-Cola bottlers by volume growth, outside of Covid-19 impacted 2020, and believes it can continue this outperformance.”
The listing was first announced in April 2021, when Coca-Cola announced plans to list CCBA shares within 18 months. CCBA will be headquartered in South Africa. It said Rothschild & Co would advise on the IPO.
Coca-Cola Beverages Africa has 16,000 employees and operates in 14 countries with 36 bottling plants. It makes up 40% of the volume of Coca-Cola products sold in Africa and is the 8th largest Coca Cola bottling operation in the world by revenue.
Bruno Pietracci, president of the Africa operating unit, said: “The Coca-Cola Company sees Africa as a key growth market and views a separate listing of CCBA as an opportunity to deliver a broad, supportive, long-term investor base for the ongoing development of the business.”
Coca-Cola’s sparkling soft drink brands include Coca-Cola, Sprite and Fanta; hydration, sports, coffee and tea brands include Powerade and Costa; and nutrition, juice, dairy and plant-based beverage brands such as Minute Maid, Simply, innocent and Del Valle.
A report last October on Bloomberg said the IPO advisers would also include Bank of America Corp., Morgan Stanley and Standard Bank Group.
Where did CCBA come from?
CCBA was formed in 2014 from the merger of i) SABMiller’s Coca-Cola bottling franchise (ABI), which used to be Africa’s largest Coca-Cola bottler and its Appletiser bottling business in South Africa together with water businesses in Ethiopia, Kenya and Uganda, ii) The Coca-Cola Co and iii) Gutsche Family Investments’ 80% shareholding in Coca-Cola South African Bottling Company (Sabco). After Anheuser-Busch InBev acquired SABMiller, Coca-Cola exercised its right to buy SABMiller’s 54.5% stake in CCBA until it could find a new owner, according to Reuters.
Gutsche’s grandfather Carl Hugo Gutsche founded the Baptist Church of South Africa from 1867, according to Wikipedia and the family founded Coca Cola in 1940 and had built up operations in South Africa, Namibia, Mozambique, Kenya, Tanzania, Ethiopia and Uganda, with headquarters in Port Elizabeth, South Africa. Gutsche is a former chairman of SABCO and a director of Haad Thip soft drink beverage company in Thailand since 2005