Coca-Cola Europacific Partners intends to pursue the acquisition of its counterpart, Coca-Cola Beverages Philippines, a fellow bottler.
A “letter of intent” has been signed between the UK-based group and Philippines conglomerate Aboitiz Equity Ventures to collaborate on the acquisition of Coca-Cola Beverages Philippines (CCBPI).
According to the proposed arrangement, Coca-Cola Europacific Partners would hold a 60% ownership stake in the business, while the remaining share would be held by the power-to-financial services group, Aboitiz Equity Ventures.
As per the proposed agreement, the valuation of CCBPI stands at $1.8 billion, based on a debt-free and cash-free approach.
CCEP has already established its presence in Indonesia, having acquired complete ownership of its local business from The Coca-Cola Co. earlier this year. Additionally, a previous deal with Coca-Cola Amatil two years ago provided CCEP with assets in markets such as Australia and New Zealand. The Indonesian and former Coca-Cola Amatil assets are now consolidated under a division named API within CCEP.
Damian Gammell, CCEP’s chief executive, said the acquisition of CCBPI “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”.
In a stock-exchange filing, CCEP said the transaction is still subject to conditions, including due diligence – described as “well underway” – and regulatory approval. The deal, if completed, is expected to be finalised around the end of 2023.
Nevertheless, CCEP said its proposed new asset was “a successful business with attractive profitability and growth prospects”.
Presenting data given by CCBPI’s management, CCEP said the business sold around 650m unit cases in its 2022 fiscal year, generating revenues of approximately $1.7bn. It gave no comparative figures for a year earlier. The business, based in Makati in metro Manila, the capital of the Philippines, has 19 factories.
CCBPI accounts for 43% of the non-alcoholic RTD market in the Philippines and 69% of the sparkling segment, CCEP added, citing Nielsen data.
The planned transaction was announced alongside CCEP’s first-half financial results.
Revenue was up 8.5% at €8.98bn ($9.87bn), or by 10.5% when excluding the impact of exchange rates.
Operating profit jumped 21% to €1.17bn. On a comparable and constant-currency basis, operating profit grew 13%.
Profit after tax increased 26.5% to €854m, or by 16.5% on an underlying basis.
Shares in CCEP, up more than 11% so far this year, were down 0.17% in early trading at €57.40 at 08:22 BST.