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London-listed Coca-Cola Hellenic Bottling Company (HBC) said it is on course for a secondary listing on the JSE after South Africa’s Competition Commission recommended its $2.6bn deal to buy Coca-Cola Beverages Africa (CCBA).The commission on Monday said it will advocate for the approval of the deal by the Competition Tribunal, with conditions, which include the previously communicated decision by HBC to pursue a secondary listing in Johannesburg.HBC told Business Day on Tuesday that the move by the commission puts it on course for a listing on the JSE this year as it looks to clear the remaining regulatory approvals.“We remain on track to complete the acquisition by the end of 2026 and are continuing to work through the customary regulatory approvals,” the company said.“We also remain on track with preparations for the secondary listing of our shares on the Johannesburg Stock Exchange.”HBC, which has a market capitalisation of £18bn (R395bn) in London, announced in October it will buy 75% of CCBA from the Coca-Cola Company and Gutsche Family Investments for $2.6bn.The commission put stringent conditions on its endorsement of the deal. These include a moratorium on retrenching workers and a commitment to investing in developing the downstream distribution and retail aspects of its South African business, among other things.“The acquiring group is an authorised bottler of The Coca-Cola Company in Europe, Eurasia, and Africa … and is also involved in the bottling and distribution of a variety of drinks, including sparkling soft drinks, water, energy and sports drinks, juice, premium spirits, coffee, and ready-to-drink tea,” the commission said.“CCBA has interests in the carbonated and noncarbonated soft drink industry in South Africa, which includes interests in bottling subsidiaries authorised to prepare, package, distribute, and sell Coca-Cola-branded beverages and other authorised branded beverages such as Monster.“The commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market.”The transaction will create the world’s second-largest Coca-Cola bottling partner by volume.The megadeal will also help HBC further diversify from Russia, its top-selling market in 2024, which accounted for 13% of its revenue, according to S&P. The ratings agency said that the CCBA deal is important for HBC because of risks to growth from ongoing sanctions on the country in response to the war in Ukraine.CCBA, run by Sunil Gupta, has been investing heavily in expanding its operations. The latest investment is a R365m outlay in a new ultramodern bottling line capable of producing 72,000 bottles per hour at its plant in Midrand, Joburg.S&P estimates that after the CCBA deal, South Africa will overtake Russia as HBC’s largest market, with about 15% of total revenues, followed by Nigeria and Russia at about 10% each and Italy and Poland with slightly less.HBC is the strategic bottling partner of the Coca-Cola group. In terms of geographical footprint, HBC will become the biggest Coca-Cola bottler worldwide, with operations in 43 countries after the CCBA deal, up from 29 now.CCBA is the eighth-largest Coca-Cola bottling partner worldwide by revenue and the biggest on the continent, accounting for about 40% of all Coca-Cola volumes sold in Africa.Business Day
