Coca-Cola Icecek (CCI), the Turkish beverage company, has inked an agreement to purchase Coca-Cola Bangladesh Beverages Ltd (CCBB) for a sum of $130 million.
CCBB stands as one of the two bottlers operating in Bangladesh, responsible for the manufacturing, marketing, and distribution of Coke brands within the nation.
According to a statement released on its website, CCI will purchase all of CCBB’s shares, totaling 100 percent ownership, at a net worth of $130 million, equivalent to over Tk 1,400 crore, after deducting CCBB’s estimated net financial debt as per the agreement.
“The equity value will be subject to a post-closing price adjustment mechanism following the completion of a closing audit to determine the exact net financial debt amount of CCBB as of the closing date,” it said.
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CCI stated that the acquisition will likely be funded using existing cash reserves of CCI International Holland BV (CCIHBV) and will result in a minimal effect on CCI’s net leverage.
Officials from CCBB have verified the development, noting that the deal is anticipated to be finalized upon receiving regulatory approval in Dhaka.
In its statement, CCI, along with its wholly-owned subsidiary CCIHBV and a subsidiary of The Coca-Cola Company, announced the signing of the deal. CCIHBV will serve as the primary direct shareholder.
CCBB is going to be transferred to the Istanbul-based company seven years after International Beverages Private Ltd (IBPL), Bangladesh, a subsidiary of The Coca-Cola Company, established the plant in 2017 in Bhaluka of Mymensingh, with an investment of $74 million and developed other infrastructure.
Abdul Monem Ltd, a local firm, is another bottler of Coca-Cola beverages in Bangladesh, where the non-alcoholic ready-to-drink market saw a 10 percent compound annual growth rate in the three years leading up to 2022.
The soft drink market in Bangladesh, estimated to be between Tk 4,000 crore and Tk 6,000 crore, is served by two US-based soft drink giants, Coca-Cola and PepsiCo, as well as by several local beverage manufacturers like Pran, Akij, and Partex.
According to CCI, the non-alcoholic ready-to-drink market in Bangladesh is anticipated to achieve a 12 percent average annual growth rate over the decade leading up to 2032.
CCI produces, distributes, and markets various Coca-Cola brands and operates in 11 predominantly Muslim countries, namely Azerbaijan, Iraq, Jordan, Kazakhstan, Kyrgyzstan, Pakistan, Syria, Tajikistan, Turkey, Turkmenistan, and Uzbekistan.
In his comment, CCI Chief Executive Officer Karim Yahi said, “We are very pleased to sign the share purchase agreement to acquire CCBB, which we see as a great opportunity to enter a market with significant future potential, where growth and value can be generated by deploying CCI’s core capabilities.”
“This acquisition also creates a more diverse geographical footprint for CCI and solidifies its alignment with The Coca-Cola Company.”
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CCI, referencing forecasts from the International Monetary Fund, stated that Bangladesh’s economy experienced an average annual growth rate of 6.5 percent from 2012 to 2022 and is projected to grow at an average annual rate of 6.7 percent from 2023 to 2028.
CCBB caters to approximately 10 crore consumers across the Rangpur, Rajshahi, Mymensingh, and Dhaka regions.
With a workforce of over 300 employees, a single bottling plant, and three main warehouses, CCBB operates approximately 300,000 points of sale and collaborates with nearly 500 distributors.
Most of CCBB’s total sales come from soft drinks, with the remaining portion of its product portfolio comprising the water category.
Over the last five years, the company has consistently enhanced its competitive standing in Bangladesh, rising to become the market leader in the soft drinks category with a 45.3 percent share as of 2023, as reported by CCI.
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