CCEP to acquire Coca-Cola Philippines for £1.4bn

Coca-Cola Europacific Partners (CCEP) has announced plans to acquire Coca-Cola Beverages Philippines (CCBPI) from the Coca-Cola Company for $1.8 billion (£1.4bn).

CCEP added that it is in advanced discussions with Philippine conglomerate Aboitiz Equity Ventures (AEV) regarding a potential joint transaction, based on a 60:40 ownership structure between CCEP and AEV.

CCEP said the proposed acquisition would build on its successful expansion into Australia, Pacific & Indonesia in 2021, positioning it as the world’s largest Coca-Cola bottler by both revenue and volume, and supporting its long-term growth strategy.

“We are excited to announce the proposed joint acquisition of Coca-Cola Beverages Philippines, Inc. with Aboitiz Equity Ventures Inc., one of the leading conglomerates in the local market,” Damian Gammell, CCEP chief executive, said.

“This offers us a great opportunity to acquire an established, well-run business with attractive profitability and growth prospects. This would be a natural next step for CCEP, creating a more diverse footprint within our existing API business segment, support Indonesia’s transformation journey and underpin our strategic mid-term objectives.”

CCEP and AEV’s non-binding Letter of Intent with The Coca-Cola Company implies an enterprise value for CCBPI of $1.8 billion, on a debt free cash free basis.

As CCEP would be the majority owner (60%), it is expected to consolidate CCBPI as of the acquisition date and establish a non-controlling interest representing AEV’s minority interest (40%). The business would be governed by a board of five members, three appointed by CCEP and two by AEV. CCEP would also appoint the CEO.

CCEP has also reported strong growth in the first half, with reported revenues growing 10.5 per cent to €8.97bn and operating profit by 13 per cent to €1.17bn (£1bn) on constant currency.

“We are also very pleased to have delivered a great first half, achieving strong top and bottom-line growth and generating impressive free cash flow,” Gammell said.

“Our performance reflects great in-market execution, strong customer relationships allowing our consumers to continue to enjoy our portfolio of leading brands across a broad pack offering. Our focus on revenue and margin growth management, along with our price and promotion strategy, drove solid gains in revenue per unit case with transactions outpacing volume.”