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Coca-Cola intends to buy ABI's stake in Coca-Cola Beverages Africa

Published 12 October 2016

The Coca-Cola Company has exercised its call option to acquire Anheuser-Busch InBev's (ABI) stake in Coca-Cola Beverages Africa.

The move is part of Coca-Cola's plans to implement its long-term strategic plan in these markets with other partners.

AB InBev, apart from producing beer, is also a bottler for non-alcoholic drinks. It has contracts with Pepsi, a long time Coca-Cola rival in some Latin American countries.

Wall Street Journal reported that Coca-Cola wants to keep AB InBev at a distance because of the fear of being acquired by it.

It is also noted that AB InBev will continue with have at least 20% in Coca-Cola Beverages Africa through SABMiller acquisition. SABMiller also has bottling contracts with Coca-Cola in several African countries including Algeria and Tunisia.

Coca-Cola says that it respects ABI's capabilities, but wants to pursue its goals with strategic partners in the region who are highly qualified and interested in the bottling business.

The soft-drinks giant will negotiate with the Belgian brewing company about the terms of the transaction, within the limitations of contractual parameters. The negotiation terms will then be followed by the process of regulatory approval.

Apart from this, Coca-Cola will continue to negotiate with other potential partners and will come up with plans to refranchise CCBA as soon as possible.

Coca-Cola intends to acquire AB InBev’s stake to account for it as a discontinued operation for reporting purpose.

For some time, Coca-Cola has been divesting in bottling and distribution businesses as it is now following a light asset policy. At present, the company has several bottling and distribution partnerships around the world.