KO Coca Cola Company

   By Colin Kellaher 
 

Coca-Cola Co. (KO) on Monday said it has ended plans to refranchise Coca-Cola Beverages Africa, opting instead to keep its 66.5% majority stake in the bottler for the foreseeable future.

The Atlanta beverages giant said it held talks with a number of potential partners for CCBA, the largest bottler of Coca-Cola beverages in Africa, but that it ultimately decided it was "in the best interests of all involved for Coca-Cola to continue to hold and operate CCBA."

Analysts at Wells Fargo termed the shift "a slight disappointment," adding that geopolitical unrest and persistent foreign-exchange volatility likely injected uncertainty into the negotiation process with potential buyers.

Coca-Cola in late 2016 agreed to pay $3.15 billion for the 54.5% interest in CCBA held by Anheuser-Busch InBev S.A. (BUD), which acquired the stake as part of its $100 billion-plus takeover of rival SABMiller PLC. At the time, the company said it planned to refranchise the bottler, a strategy it has been using to focus on its more profitable concentrate business.

Coca-Cola on Monday said that while it remains committed to the refranchising process, it sees "great opportunities to create even more value" with CCBA, which serves 12 countries in Africa.

The Wells Fargo analysts said Africa is one of the most attractive geographies for Coca-Cola, and that the company wants CCBA "to be well positioned with a strong infrastructure to capitalize on long-term increases in disposable income" across the continent.

Coca-Cola, which has accounted for CCBA as a discontinued operation since it became the controlling shareowner in 2017, said it will reclassify the bottler's results into continuing operations in the second quarter.

The company said the reclassification won't affect its full-year organic revenue and adjusted per-share earnings growth guidance.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

May 20, 2019 13:45 ET (17:45 GMT)

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