Coca-Cola considers complete exit from bottling business in Africa

• According to Bloomberg’s media report, US soft drink producer Coca-Cola is mulling a sale or IPO for its bottling business in Africa.
• People familiar with the matter say a sale or an IPO could value the bottling business unit around $6 billion or more, depending on the buyer.
• Coca-Cola Beverages Africa serves 13 countries, including Kenya, Ethiopia and Ghana, and accounts for about 40% of the Atlanta-based company’s drinks sold on the continent.

The company, which currently holds 66.5% of Coca-Cola Beverages Africa, serves 13 countries, including Kenya, Ethiopia and Ghana, and accounts for about 40% of the Atlanta-based company’s drinks sold on the continent.

According to Bloomberg’s report, the company will soon be deciding the future of its bottling business after its shares dropped 1.50% to $53.04 at the last check. A sale or an IPO could value the business around $6 billion or more, people familiar with the matter told said.

The rumours suggest the company is planning its exit due to poor sales performance caused by Covid-19 lockdowns at restaurants, amusement parks and stadiums. In other reports, the exit is due to claims that the market entry of The Rite Food soft drinks (Big Cola & Bigi) in Nigeria caused a Cola-war that ended up with Coca-Cola losing substantial customers as demand declined.

Since the African market competition for soft drinks is getting fiercer, it is about time for Coca-Cola to make a cold judgment and the best choice.