The Coca-Cola Company, SABMiller and Gutsche Family Investments (GFI) will combine the bottling operations of their non-alcoholic ready-to-drink beverages businesses in Southern and East Africa.
The new entity, Coca-Cola Beverages Africa which will be headquartered in South Africa, is set to serve 12 high-growth countries which account for around 40% of all Coca-Cola beverage volumes in Africa.
Africa has seen high growth in the beverages industry with an increase in personal disposable income, a fast-growing population and increase in per capita consumption. Currently, there are more than 30 bottling companies across Africa which gives employment to more than 14,000 employees.
Coca-Cola said that Coca-Cola Beverages Africa will be the largest Coca-Cola bottler on the continent which will have the capacity to capture and accelerate top-line growth. This will also allow the company to develop best operating practices and invest in production, sales and distribution and marketing to benefit from the growing demand.
The Coca-Cola Company CEO and chairman Muhtar Kent said: "A combined Coca-Cola bottling operation is further evidence of our commitment to Africa, and our firm belief in the tremendous growth prospects that the continent offers.
"As one of the top 10 largest Coca-Cola bottling partners worldwide, Coca-Cola Beverages Africa can leverage the scale, resources, capability and efficiency needed to accelerate Coca-Cola growth and contribute to the economic and social prosperity of African communities."
After the completion of the merger, SABMiller will own 57%, GFI 31.7% and Coca-Cola 11.3% of the new company.
SABMiller CEO said: "Soft drinks are an important element of our growth strategy. This transaction increases our exposure to the total beverage market in Africa. The opportunity is significant, with favourable demographics and economic development pointing to excellent growth prospects. This also signifies a strengthening of our strategic relationship with The Coca-Cola Company."
GFI chairman Phil Gutsche said: "Our family sees this merger as an important and logical step to enable Coca-Cola Beverages Africa to optimise the opportunities for development in the rapidly-evolving Africa beverage market."
