Coca-Cola Eyes Local Pockets, Exports After Nigerian Deal
(Bloomberg) -- Coca-Cola Co. sees plenty of expansion opportunity in Africa after taking full control of Nigerian juice maker CHI in a deal that underlines its growing emphasis on lower-sugar drinks and emerging markets.
The U.S. soft drinks giant on Wednesday acquired the remaining 60 percent of CHI for an undisclosed amount, three years after making an initial investment in the Lagos-based company.
The acquisition “gives us the platform that allows us to target more and more consumers’ disposable income on commercial beverages,” Peter Njonjo, President, Coca-Cola West Africa, said in an interview Thursday. Nigerians spend more than 310 billion naira ($855 million) daily on food, with just 1.5 percent of that going to non-alcoholic beverages, he said.
The company will also build a plant in Africa’s most populous nation to meet rising demand locally and for exports to the rest of the continent and Asia, Njonjo said. “This is a Nigerian brand that we will be scaling globally.”
CHI already exports to Togo and Ghana and has local partners in South Africa, Njonjo said. It is also looking at Cameroon, Ghana, Democratic Republic of Congo, he said.
While Coca-Cola didn’t disclose the terms of the deal, the Financial Times said in 2016 the 40 percent stake cost about $240 million. Last year, the firm agreed to pay more than $5 billion for the U.K.’s Costa coffee chain, also part of a diversification from its ubiquitous flagship brand that is sold in more than 200 countries.
The shares closed 1 percent higher on Wednesday in New York, where Coca-Cola was listed 100 years ago, giving it a market value of $204 billion.
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