Jubilant Bhartia Group Acquires 40% Stake In Coca-Cola’s Bottling Arm For Rs 12,500 Cr – News18

Coca-Cola, the global beverage leader, has sold a 40% stake in its Indian bottling arm, Hindustan Coca-Cola Beverages Pvt Ltd (HCCBL), to Jubilant Bhartia Group. Although the exact financial terms of the deal have not been officially disclosed, media reports estimate the transaction value at approximately Rs 10,000 crore. This move signifies a strategic shift in Coca-Cola’s operations in India and reflects the growing influence of Jubilant Bhartia Group in the country’s beverage sector.

“The Coca-Cola Company today announced that it has reached an agreement with Jubilant Bhartia Group, a multi-billion conglomerate with global presence in diverse sectors, to acquire 40% stake in Hindustan Coca-Cola Holdings Pvt Ltd, the parent company of the largest Coca-Cola bottler in India, Hindustan Coca-Cola Beverages Pvt Ltd,” a joint statement said.

These changes and investment represent a significant milestone for Coca-Cola as the company continues to pursue its purpose to refresh the world and make a difference, the statement said.

Bhartia family to lead India’s beverage industry

The acquisition positions the Bhartia family as a major player in India’s beverage industry. Hindustan Coca-Cola Beverages, which manufactures and sells 37 products across eight categories, including soft drinks, juices, and energy drinks, has been a major revenue driver for Coca-Cola India.

India, Coca-Cola’s fifth-largest market by volume, is seen as a crucial growth area for the company, with its low per capita consumption of packaged soft drinks offering significant expansion potential.

The Bhartias opted for financing partnerships with Goldman Sachs to avoid over-leveraging their conglomerate. Goldman Sachs will later syndicate the investment to domestic mutual funds and foreign banks. Earlier, the family explored alternative financing options with Bain Credit, Apollo Global Management, and others.

Coca-Cola’s Asset-Light Strategy

Coca-Cola India is following PepsiCo’s asset-light model, aiming to create value through the sale of its HCCB stake. This sale could pave the way for an IPO, helping to establish HCCB’s valuation. PepsiCo had previously shifted its bottling operations to Varun Beverages, significantly boosting Varun’s market value, according to a report by The Economic Times.

HCCB Financial Performance

Hindustan Coca-Cola Beverages recently reported a 9.2% increase in revenue, totaling Rs 14,021 crore for FY24, along with a 247% year-on-year surge in net profit. The company also plans to invest $1.5 billion over the next five years to expand its bottling capacities and develop new facilities in Gujarat and Madhya Pradesh.