Coca Cola Co. (NYSE: KO) and Anheuser-Busch Inbev SA (NYSE: BUD) said in the joint statement that they have already reached an agreement to transfer AB InBev’s 54.5% stake in Coca-Cola Beverages Africa (CCBA) to Coca-Cola for $3.15 billion. The deal is expected to close by the end of 2017, subject to regulatory approval.
The Coca-Cola Beverages Africa was formed with SABMiller and South Africa’s Coca-Cola Sabco in 2014. The company owns over 30 bottling plants and operates in 10 countries including Namibia, Kenya, Uganda, Mozambique, Ghana, Mayotte, Comoros, South Africa, Tanzania and Ethiopia.Coca-Cola insists on change-of-control clauses, which allows the company to keep the rights to buy back 54.5% stake if a change of control happens.
“We will move forward with our long-term strategic plan in these important growth markets,” said Muhtar Kent, the Chairman and CEO of Coca-Cola Co. “We are continuing negotiations with a number of parties who are highly qualified and interested in these bottling territories and look forward to refranchising these territories as soon as practical following regulatory approval.” In May 2017, Kent is stepping down as CEO. James Quincey, the current president and chief operating officer, will be the next CEO.
Along with the $3.15 billion deal, the two firms also announced that Coca-Cola will take other African areas that are not operated by Coca-Cola Beverages Africa, including Zimbabwe, Zambia and Botswana, and also bottling businesses in El Salvador and Honduras, for an undisclosed amount. The deal is also expected to close by the end of 2017.