Coca-Cola to gulp down Keringet in merger plan

Coca-Cola is set to acquire Keringet water, a product of Crown Beverages, under a $260 million (about Sh23.4 billion) deal with beer maker SABMiller.

The deal involves Coca-Cola acquiring rights to SABMillers 19 non-alcoholic brands in Africa including the brewer’s flagship Appletiser brand.

SABMIller acquired Crown Beverages in 2011.

The transaction, the two firms said in a  statement yesterday, is part of a merger of their bottling business in South and East Africa aimed at establishing a company with $2.9 billion in annual revenue.

It also involves the Gutsche Family Investments who are the majority owners of Coca-Cola’s South African Bottling Company.

The new bottler, Coca-Cola Beverages Africa, is thus expected to serve 12 high-growth countries accounting for approximately 40 per cent of all Coca-Cola beverage volumes on the continent.

FALLING REVENUES

“Africa offers significant growth potential in beverages, underpinned by rising personal disposable income, a fast-growing population and increasing per capita consumption,” Coca-Cola said in a statement.

In Uganda, Coca-Cola will acquire right for the country’s leading water brand Rwenzori, Ambo waters in Ethiopia and Voltic water in Nigeria.

“The merger is not in any way going to affect our local partners since Coca-Cola owns the brand while partners concentrate on its packaging and distribution,” a source at Coca-Cola East Africa, who did not want to be named, said.

SABMiller will, however, have a 57 per cent, Gutsche Family Investments: 31.7 per cent  and The Coca-Cola Company holding 11.3 per cent upon completion of the merger.

The Atlanta-based beverage maker is under pressure to revive falling revenue globally with consolidation of business and diversification seen as a key way of cutting costs.

The latest merger follows the consolidation of eight bottlers in Portugal and Spain into a single business last year.

The group has 250 bottlers worldwide.