Investors are waiting with bated breath to see if 2025 will eventually be the year in which Coca-Cola Beverages Africa (CCBA) will follow through with its delayed mega initial public offering (IPO) on the JSE, after renewed optimism in SA after the formation of the government of national unity last year.
The IPO, first mooted in 2021, has been delayed as the company waits for market conditions to improve.
Bloomberg reported last year that Coca-Cola would forge ahead with listing its African bottling business this year on the JSE and Amsterdam, seeking a valuation of more than $8bn (R151bn) for the business.
Muneer Ahmed, portfolio manager at Aeon Investment Management, said market conditions look favourable for CCBA’s mooted IPO.
“The listing of CCBA has been anticipated by the market for a number of years now. Most recently this came close to materialising in late 2021/early 2022. Market volatility at the time as a result of the Russian invasion of Ukraine seemed to stall these plans. Bear in mind that at a similar time, Brait’s listing of Premier Foods was also delayed due to weak market conditions (eventually listing in 2023),” Ahmed said.
“Renewed market optimism may well reopen these talks. The successful listing of Boxer by Pick n Pay late last year has certainly highlighted the market appetite for high-quality new listings. It would therefore not be surprising to see the listing come to market in current conditions.”
The successful listing of Boxer by Pick n Pay late last year has certainly highlighted the market appetite for high-quality new listings. It would therefore not be surprising to see the listing come to market in current conditions.
CCBA was formed in May 2016 after the Competition Tribunal conditionally approved the merger of the Southern and East African bottling operations of the nonalcoholic, ready-to-drink beverages businesses of the Coca-Cola Company, SABMiller and Gutsche Family Investments.
According to the company’s website, it is the eighth-largest Coca-Cola bottling partner worldwide by revenue and the biggest on the continent, accounting for about 40% of all Coca-Cola volumes sold in Africa. It employs 17,000 people at its 40 bottling plants.
CCBA last year hired Sunil Gupta as its new CEO, saying he would play a “critical role in The Coca-Cola Company’s continued commitment to successfully list CCBA as a public company via an IPO once market conditions become more favourable”.
Gupta replaced Jacques Vermeulen, who retired from the group after 28 years, the last five of which he was CEO.
Chris Logan, CIO and owner of Opportune Investments, said: “I think the GNU has created a very favourable backdrop and hopefully Coca-Cola will take the plunge on its IPO. As we have seen in the recent rand weakness things can change quickly, so best to not delay in this rapidly changing environment.”
CCBA operates in 15 countries, including its six key markets of SA, Kenya, Ethiopia, Uganda, Mozambique and Namibia, as well as Tanzania, Botswana, Ghana, Zambia, the islands of Comoros and Mayotte, Eswatini, Lesotho and Malawi.
According to data supplied by market research firm Euromonitor International, Coca-Cola has a 45% market share in the soft drinks category in SA, 37% in Kenya, 16.5% in Uganda and 26% in Tanzania.
Coca-Cola, in terms of sales, occupies the top position in SA, Kenya and Tanzania, and is second to rival PepsiCo in Uganda.
SA’s fiscus is set to net R4.5bn from AB InBev’s SA subsidiary, SA Breweries (SAB), after the SA Revenue Service (Sars) and the brewer settled their tax dispute.
The fight centred on the 2017 transaction that saw AB InBev sell its stake in CCBA after its purchase of rival brewer SABMiller.
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