Coca Cola buys out AB InBev's stake in Coca-Cola Beverages Africa

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'If Coca-Cola adverts told the truth'

The Coca-Cola Company and Anheuser-Busch InBev (AB InBev) on Wednesday reached an agreement regarding the transition of AB InBev’s 54.5 percent equity stake in Coca-Cola Beverages Africa for R53-bn (US$3.15 billion) after customary adjustments.

This comes after AB InBev recently took over SABMiller earlier this year for R1.5 trillion, a move that created the world’s biggest beer maker.

In addition, The Coca-Cola Company and AB InBev reached an agreement in principle for the largest Coca-Cola bottler to acquire the world’s largest brewer’s interest in bottling operations in Zambia, Zimbabwe, Botswana, Swaziland, Lesotho, El Salvador and Honduras for an undisclosed amount.

READ: Coca-Cola bottles African stake from ABInbev

Coca-Cola Beverages Africa includes the countries of South Africa, Namibia, Kenya, Uganda, Tanzania, Ethiopia, Mozambique, Ghana, Mayotte and Comoros.

The Coca-Cola Company plans to hold all of these territories temporarily until they can be refranchised to other partners, with an intent to account for the acquired stakes as a discontinued operation for reporting purposes.

Chairman and chief executive of The Coca-Cola Company, Muhtar Kent, said they were pleased to have reached an agreement quickly that was in everyone’s best interests.

“We will move forward with our long-term strategic plan in these important growth markets,” Kent said.

“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.”

READ: Coca-Cola to swallow ABInBev share in African subsidiary

Carlos Brito, chief executive of AB InBev, said: “We are happy that we have been able to reach this agreement with The Coca-Cola Company in a timely manner and with a satisfactory outcome for all parties”.

The transactions between Coca-Cola Beverages Africa and AB InBev are subject to the relevant regulatory and minority approvals and are expected to close by the end of 2017.