UPDATES M&A
Danish Brewing acquires Carlsberg distributor in Kenya King Beverage
KENYA – Danish Brewing East Africa Limited, a subsidiary of Bounty Global Management firm, has acquired Carlsberg and Tuborg beers distributor in Kenya, King Beverage Limited from Centum Investments. Established in 2014, King Beverage enjoys exclusive rights to import and distribute such brands as Carlsberg and Tuborg beers, Teacher whisky and Jim Beam whiskeys in the country. Centum Investment sold King Beverage, in which it held 100% of the issued shares, for US$1.3 million (Sh130 million) against the US$5 million (Sh500 million) it had invested in the company. Centum’s decision to offload the business comes five years after it invested in the company, with the investment firm noting that it has been struggling to make the business profitable. It had expected to shift part of the business from import to local manufacturing, however, it has cited challenges in the alcoholic beverages industry to impede the expansion. “The strategic intent by Centum was to grow volumes of the business, initially under an import model and later under local production. However, due to various industry challenges, including competition from gray products and parallel imports of similar products, it was evident that the business would not be able to scale up volumes to warrant the further investment by Centum into local production,” said Centum in a statement. Centum added that it would in future avoid investing in new ventures or start-ups and instead go for more mature investments where returns are almost guaranteed. The company recently announced it was selling all its shares in two Kenyan Coca-Cola franchise bottlers; Almasi Beverages Limited (ABL) and Nairobi Bottlers (NBL) to Coca-Cola Beverages Africa (CCBA) for US$192.5 million (KSh19.5 billion).
M&A
Coca-Cola Beverages Africa acquires majority stake in Eswatini bottler ESWATINI – Coca-Cola Beverages Africa (CCBA) has acquired 60% shareholding in the soft drinks business of Eswatini Beverages. The non-alcoholic ready-to-drink business in Eswatini, in which the remaining 40% is owned by Sovereign wealth fund Tibiyo Taka Ngwane, will be known as Eswatini Coca-Cola Beverages (ECCB) and will operate as a subsidiary of CCBA. Following the transaction, ECCB has appointed Logico Unlimited as the official distributor of all CocaCola products in Eswatini optimize the distribution system. Logico Unlimited will be responsible for the collection of monies owed, while ECCB will be responsible for the negotiations of trading terms and relationships with customers. “Eswatini customers will benefit from being part of a consolidated, successful Coca-Cola ecosystem that spans the continent, creating new opportunities for everyone across the value chain,” ECCB country manager Sanele Khumalo said. “We will also be able to respond to consumer demand more quickly. Expanding our African footprint brings huge benefits to local consumers and businesses. By leveraging scale, we can do more for our customers and also drive our sustainability goals. The creation of ECCB is another milestone in that strategy,” Khumalo added. CCBA was formed in 2016 through the combination of the African nonalcoholic ready-to-drink bottling interests of SABMiller, The Coca-Cola Company and Gutsche Family Investments. AB
"ESWATINI CUSTOMERS WILL BENEFIT FROM BEING PART OF A CONSOLIDATED, SUCCESSFUL COCA-COLA ECOSYSTEM THAT SPANS THE CONTINENT, CREATING NEW OPPORTUNITIES FOR EVERYONE ACROSS THE VALUE CHAIN" Sanele Khumalo InBevlater acquired SABMiller and reached an agreement to transfer AB InBev’s 54.5% equity stake in CCBA to Coca-Cola. Earlier this year, The Coca-Cola Company said that it will retain its majority stake in CCBA for the foreseeable future, despite previously announcing its intention to refranchise the African bottler. CCBA has since then continued to consolidate its soft beverage bottling operations in Africa. In December last year, CCBA acquired its Coca-Cola bottling business from Zambia Breweries, a subsidiary of Anheuser-Busch InBev. In June, CCBA entered into an agreement to acquire stakes in two Kenyan Coca-Cola franchise bottlers from public investment company, Centum Investments in a US$192.5 million valuation. Coca-Cola Beverages Africa is the 8th largest Coca-Cola bottling partner in the world by revenue and the largest on the continent. It accounts for 40% of all CocaCola products sold in Africa by volume.
INVESTMENT
Ethiopian firm inaugurates US$1.37m coffee processing plant ETHIOPIA – Melange Coffee Roasters, a family-owned coffee roaster company has inaugurated a new coffee roasting and packaging plant after investing US$1.37 million (40 million Br). The facility has a daily capacity of roasting 7,500 kilograms and a packaging capacity of 3,600 kilograms of coffee per hour. Solomon Kassa, co-owner and operations director of Melange Coffee Roaster notes that the company has secured a 1,000 tonnes contract for one year and is about to export its first batch of roasted coffees with an immediate entry to Chinese and South African markets. The automated packing unit has a capacity of packing 1,800
bags, each containing 250gm of processed powder coffee, an hour. In a country where coffee is a major agricultural commodity, Solomon is confident that there is a huge demand for value added coffee from Ethiopia. Despite being the leading coffee exporter in Africa, the country have been struggling with market challenges in the international market especially with regards to trade prices and contract breaches. In the concluded budget year, Ethiopia earned US$763 million from the export of 230,764 tonnes of coffee, the second highest in Ethiopian history, lower than last year’s highest export level.