Aboitiz Equity Ventures Inc. (AEV) on Wednesday bared acquiring the rights to bottle Coca-Cola products in the Philippines for $1.8 billion.
AEV and Coca-Cola Europacific Partners PLC (CCEP), have entered into a non-binding letter of intent with The Coca-Cola Co., setting out the terms under which AEV and CCEP propose to acquire 100 percent ownership of Coca-Cola Beverages Philippines Inc., the local bottling unit of the soft drink company.
The $1.8 billion acquisition price is on debt-free, cash-free basis consistent with TCCC’s intent to divest its bottling operations, AEV said.
“If completed, the proposed acquisition would build on AEV’s portfolio diversification strategy to enter the branded consumer goods space and on CCEP’s successful expansion into the Asia-Pacific region via its acquisition of Coca-Cola Amatil in 2021,” the company said.
“AEV would be well positioned to support CCBP’s growth ambition given the synergies that can be generated from AEV’s other businesses,” it said.
AEV’s proposed acquisition of CCBP with CCEP, presents an opportunity to co-acquire an established, well-run business with attractive profitability and growth prospects.
“There is, therefore, no certainty at this stage that the proposed acquisition of CCBP will be completed, and as such, further updates will be provided in due course,” the company said.
Assuming a definitive agreement is finalized and executed, the transaction is seen closed around the end of this year, subject to certain government and regulatory approvals, including clearance from the Philippine Competition Commission.
The Philippines is Coca-Cola’s second largest market in Southeast Asia whose bottling operations has always been colorful.
San Miguel Brewery Inc. was the first to bring Coca Cola products to the country in 1927. In the 80s, the conglomerate spun off its soft drink business to become The Coca Cola Bottlers Philippines Inc., and became a joint venture between San Miguel Corp. and Atlanta’s The Coca-Cola Co.
In 1997, San Miguel traded its stake in Coca-Cola Bottlers to Australia’s Coca Cola Amatil Ltd. in exchange for a 25 percent stake in the Australian company. The local conglomerate later sold all of its holdings in Amatil.
In 2001, San Miguel and The Coca Cola Co. joined forces to reacquire Coca Cola Bottlers from the Australian company, with the local conglomerate owning a 65 percent stake.
In 2007, the US company bought out all of the stake of San Miguel in the local bottling unit and then sold 51 percent of it to Coca Cola Femsa SA, the world’s second largest bottlers of the product, in 2012. It later on sold its stake back to Coca Cola.
