The Coca-Cola Company announced on Monday it would retain its majority stake in South African-based Coca-Cola Beverages Africa (CCBA) as talks to find a bottling partner(s) could not be reached.
The soft drinks giant had wanted to refranchise the bottling unit as part of its global plan to unload its capital intensive manufacturing and distribution operations to focus on its main beverage business and improve margins.
“While we remain committed to the refranchising process, we believe it’s in the best interests of all involved for Coca-Cola to continue to hold and operate CCBA,” Coca-Cola said in a statement.
The company said it has had discussions with potential bottling partners but could not reach a deal. Coca-Cola HBC, Cola-Cola European Partners, Coca-Cola SABCO and Heineken N.V. were all rumoured to be vying for the stake.
Shares of Coca-Cola HBC were down 7.4%.
“Coca-Cola Beverages Africa is a very important part of the Coca-Cola system, and we see great opportunities to create even more value,” said Coca-Cola President and Chief Operating Officer, Brian Smith.
Coca-Cola in 2016 reacquired the 54.5% stake in CCBA formerly held by SABMiller from AB InBev following the merger of AB InBev and SABMiller. At the time, Coke said it would hold onto the stake until it finds a bottling partner. CCBA has operations in about a dozen African countries including South Africa, Kenya, Uganda andTanzania amongst others.
The company said it would reclassify CCBA holding in its financial statement from the second quarter of 2019 to ‘Continued Operations’, from ‘Discontinued Operations’.