Coca-Cola HBC AG (“Coca-Cola HBC”) announced that its wholly-owned subsidiary Coca-Cola HBC Holdings BV (“CCH Holdings”) has agreed to acquire approximately 94.7% of Coca-Cola Bottling Company of Egypt S.A.E. (“CCBCE”) from its major shareholders, a wholly-owned affiliate of The Coca-Cola Company (“TCCC”) and MAC Beverages Limited (“MBL”) and certain of its affiliated entities for an agreed combined purchase price of US$427 million, subject to adjustments.
Access to the second largest Non-Alcoholic Ready To Drink market (“NARTD”) in Africa by volume, significant opportunity to leverage Coca-Cola HBC’s route-to-market capabilities and 70 years of experience operating in emerging markets to increase penetration of The Coca-Cola Company’s brand portfolio and drive category leadership were among the few major reasons for the buy, stated the company.
Zoran Bogdanovic, CEO of Coca-Cola HBC, said, “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.”
Abdul Galil Besher, Chairman of MAC Beverages Limited and CCBCE, commented, “We are very pleased to pass on to Coca-Cola HBC the ownership torch of CCBCE. As a leading anchor bottler of the Coca-Cola system, we believe that Coca-Cola HBC will accelerate CCBCE’s growth ambitions, by combining its expertise, breadth of knowledge, know-how and critical mass, with the company’s deep market knowledge developed over our multi-decade presence in Egypt.”
Brian Smith, President and Chief Operating Officer of The Coca-Cola Company, said, “This transaction promises to strengthen our system in Egypt, where the expertise of Coca-Cola HBC will be a complement to the local knowledge and capabilities of CCBCE. This agreement represents an important development in the Coca-Cola system’s long-term commitment to the growth and development of this important market.”
For the year ended 31 December 2020, CCBCE recorded net sales revenue of EGP 7.4 billion and volume of approximately 275-million-unit cases and net profit before tax of EGP 135 million. Its total assets as of that date amounted to EGP 5.2 billion.
The Proposed Transactions constitute a Class 2 transaction for the purposes of the UK Listing Rules. Coca-Cola HBC intends to finance the Proposed Transactions primarily from its cash resources and incremental use of existing debt facilities, as required. The Proposed Transactions are expected to bring the Coca-Cola HBC group’s Net Debt/Comparable Adjusted EBITDA ratio close to the upper end of its medium-to-long term leverage target.
Completion of the transaction is expected to take place by late Q4 of 2021.