Skip to main content

Coca-Cola Reportedly in Talks to Exit African Bottling Unit

Coca-Cola is considering a sale of its majority stake or an IPO to exit its largest bottling unit in Africa, according to Bloomberg.

Beverage giant Coca-Cola  (KO) is revisiting plans to sell its majority stake in its African bottling unit, according to a media report. A deal could value the entire unit at approximately $6 billion, said sources in the report. 

Shares of the Atlanta-based company dropped 1.50% to $53.04 at last check.

Coca-Cola has a 66.5% stake in Coca-Cola Beverages Africa and is considering a sale or an initial public offering among its exit options, Bloomberg reported.

People familiar with the matter told Bloomberg that the talks are still at the discussion stage and the valuation could change depending on buyer interest.

Coca-Cola Beverages Africa is based in South Africa and has operations in 13 countries across southern and eastern Africa, including more than 30 bottling plants. Coke and South Africa-based Gutsche Family Investments, another long-time bottling partner, own the rest of the business.

Coca-Cola initially tried to sell its stake in the unit back in 2017, drawing interest from Coca-Cola Hellenic Bottling Company and Heineken NV, Bloomberg reported. Coca-Cola bought the stake in its largest bottling unit in Africa from Anheuser-Busch InBev  (BUD)  for $3.15 billion in 2016.

Earlier this month, analysts at RBC Capital upgraded Coca-Cola stock to outperform from sector perform as a COVID reopening play.

"Things have changed" since the investment firm downgraded the stock on Jan. 4, said RBC analyst Nik Modi. Consumers will be able to move around more freely, which is expected to benefit sales, the analyst said. 

The firm raised its price target to $60 a share from $55. 

Last month, the soft drink major posted better-than-expected earnings and reinstated guidance despite uncertainties sparked by the coronavirus pandemic.