Coca-Cola Europacific Partners said that it intends to jointly acquire Coca-Cola Beverages Philippines with Aboitiz Equity Ventures (AEV) for $1.8 billion (€1.64 billion), in an effort to become the world's largest Coca-Cola bottler by revenue and volumes.
The deal to buy Coca-Cola's Philippines business in cash will be on 60:40 ownership structure between CCEP and Philippines conglomerate Aboitiz.
CCEP has signed a non-binding term sheet and is in advanced discussions with AEV regarding a potential joint transaction, the company said in a statement.
'A Great Opportunity'
“Today, 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," commented Damian Gammell, CCEP chief executive. "This offers us a great opportunity to acquire an established, well-run business with attractive profitability and growth prospects."
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 to 3 times by the end of 2023 is expected to be achieved in 2024 instead.
In June, CCEP announce plans to to invest a minimum of €700 million this year in enhancing customer service while also making significant strides towards fulfilling its sustainability goals. The group also recently announced progress in reducing the use of virgin plastic in its packaging.
The group reported revenue of €8.98 billion in the first half of its financial year, a reported increase of 8.5% on the corresponding period last year. Operating profit stood at €1.17 billion, a 21.0% increase.
“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 added. "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."
The company cited 'solid volume growth' across developed markets, while its 'focus on revenue and margin growth management', coupled with a pricing and promotional strategy, drove 'solid gains' in revenue per unit case.
Additional reporting by ESM