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Coca-Cola Co. (NYSE:KO) Mulling Sale Or IPO of Its Holdings In Coca-Cola Beverage Africa

Coca-Cola Co. (NYSE:KO) is considering options for its Africa bottling unit, which includes an initial public offering, or sale, according to sources. The IPO or sale values the business at $6 billion, but this could change depending on potential buyers’ interest level.

Coca-Cola to sell holdings in Africa bottling business

The beverage company holds around 65% stake in Coca-Cola Beverage Africa, and sources confirmed that it is in discussion with potential advisers regarding its exit options. People familiar with the matter who sought anonymity because details aren’t public yet said that deliberation is going on, but there is no certainty that they will result in an IPO or sale. When asked about the development, a representative of the Coca-Cola Africa business declined to comment and referred questions to Coca-Cola.

Interestingly, this isn’t the first time the company is trying to offload its holdings in the unit. In 2017, the company considered selling its interest following interest from Coca-Cola HBC AG and Heineken NV. This came barely a year after it has acquired a majority stake in the unit after paying $3.15 billion to acquire Anheuser-Busch InBev out of the bottling business.

Coca-Cola acquired the South Africa bottling business

According to its website, Coca-Cola Beverages Africa currently serves 13 African nations including, Ethiopia, Kenya, and Ghana. The unit accounts for 40% of the company’s drinks sold in Africa. It is important to note that the company completed a deal to increase its local shareholding in the South Africa bottling business early this year. The company bought the interest at $3.15 billion after Budweiser brewer took over its drinks partner in the region.

Coca-Cola’s global operations have been disrupted by the COVID-19 pandemic, which resulted in the closure of amusement parks, stadiums, and restaurants. In the quarter ended December 31, organic sales dropped 3% amid pandemic challenges. Interestingly, this sales decline was not severe as analysts had projected. The company is now holding high-single-digit revenue growth this year as life returns to normalcy and vaccinations intensify.

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