MANILA -The Aboitiz family conglomerate is teaming up with Coca-Cola Europacific Partners PLC (CCEP) to jointly buy domestic beverage giant Coca-Cola Philippines for $1.8 billion (P100 billion).
Philippine-listed Aboitiz Equity Ventures (AEV) is eyeing a 40-percent stake in the venture while CCEP will get 60 percent. Coca-Cola’s products have been sold in the country since the beginning of the 20th century and were locally produced since 1927. It owns carbonated beverage brands such as Coca-Cola, Royal and Sprite.
Aboitiz said in a statement on Wednesday it signed a nonbinding term sheet and is in “advanced” talks with CCEP for the acquisition of 100 percent of Coca-Cola Philippines from US-based The Coca-Cola Co.
The parties hope to complete the deal before the end of 2023 after meeting several closing conditions, the statement showed.
Aboitiz, which is in the midst of an ongoing business transformation program, said the deal “offers a great opportunity to coacquire an established, well-run business with attractive profitability and growth prospects.”
“If completed, the proposed acquisition would build on AEV’s portfolio diversification strategy to enter the branded consumer goods space and on CCEP’s successful expansion into the Asia-Pacific region via its acquisition of Coca-Cola Amatil in 2021,” it said, referring to the latter’s $6.6-billion takeover deal two years ago.
The P300-billion Filipino power, banking, food and infrastructure conglomerate added it was “well positioned to support [Coca-Cola Philippines’] growth ambition given the synergies that can be generated from AEV’s other businesses.”
The Philippines unit accounted for 8 percent of The Coca Cola Co.’s case volume mix in 2022—its fourth largest market after China, India and Japan, the company’s latest annual report showed. Coca-Cola Philippines has over 9,000 employees. Its domestic footprint spans 73 production lines and 19 plants serving over 1 million outlets.
Aboitiz said on Wednesday that closing conditions include an ongoing due diligence review and the signing of the definitive agreement.
“There is, therefore, no certainty at this stage, that the proposed acquisition of [Coca Cola Philippines] will be completed, and as such, further updates will be provided in due course,” it said.
“Currently, assuming the definitive agreements will be agreed and executed, the potential transaction is expected to close around the end of [full-year 2023], subject to the receipt of certain governmental and regulatory approvals, including clearance from the Philippine Competition Commission,” it added.
CCEP, in a statement, said it had signed a non-binding term sheet and is in advanced discussions with AEV regarding a potential joint transaction.
CCEP, which bottles and sells Coca-Cola products in Western Europe, Australia and New Zealand, also said that its earlier expectation to return to the top-end of its net debt to adjusted core profit range of 2.5-3 times by the end of 2023 is expected to be achieved in 2024 instead. INQ
-With a report from Reuters
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