Greek Coke bottler Coca-Cola Hellenic (CCH) has won shareholder approval to buy out the Nigerian Bottling Company (NBC) and turn it into a wholly-owned subsidiary in a deal worth $136 million, its local unit said on Monday.
CCH, the world’s second-largest bottler of Coca-Cola, which already holds 66.4 percent of the Nigerian company (NBC), said it will de-list the local unit from the stock exchange on September 7, according to its scheme document.
CCH bottles and distributes Coke, Sprite and Fanta in 27 countries in Europe and in Nigeria, which accounted for 16.6 percent of its total sales volume last year. Shareholders in NBC, which holds the Coca-Cola franchise in Africa’s most populous nation, will receive N47 ($0.31) per share under the deal. Shares in NBC closed at N43 after the announcement, representing an 11 percent premium.
Industry sources say CCH plans to invest about $300 million in the local business to expand operations over the next two years to fend off competition. CCH in December said the proposed transaction will result in cost savings and allow the Nigerian company to fully leverage the financial strength and resource of its parent.
(Reuters) Profit margins at NBC have been eroded in recent years due to competition from Nigerian Pepsi franchise Seven-Up and other local brands. Its EBITDA margins fell to around 9 percent in 2008-09 from a peak of 13 percent in 2007, according to analyst reports. Guinness, Diageo commit to nation’s economy with £225m investment
Guinness Nigeria plc, a significant player in the manufacturing sector of the Nigerian economy, along with its UK parent company Diageo plc; has extended its commitment to the Nigerian economy by allocating £225million (NGN 55 billion) to expand the capacity of its brewing operations.
On completion of the expansion project, Guinness Nigeria will create an additional 200 permanent jobs for Nigerians. The formal announcement of the investment comes closely after the recent opening of a new brew house in the company’s Ogba brewery, which was commissioned in February by the UK Minister for Africa Henry Bellingham MP. The expansion project has become imperative to meet the growing demands of consumers for Guinness Foreign Extra Stout and Harp Lager Beer and other brands enjoyed nationwide.
The investment will include the upgrade of existing facilities as well as increase the brewing capacity of both Benin and Ogba Breweries.
Devlin Hainsworth, managing director, Guinness Nigeria plc, said: “Nigeria is an exciting and vibrant place to do business, and the increased demand for our iconic brands such as Guinness and Harp requires us to invest in our breweries and infrastructure.
Guinness Nigeria is a significant contributor to economic growth through paying taxes to government, generating capital growth and distributing dividends to our many shareholders and creating broad-based wealth through our extensive value chain.
We are delighted that we will create a significant number of jobs for Nigerians upon completion of the project.” Nick Blazquez, President Diageo Africa, accompanying UK Prime Minister David Cameron to Nigeria, said: “Diageo is proud of its history and the heritage that Guinness Nigeria has with over 60 years’ brewing experience in the country.
Guinness Nigeria has become a flagship Nigerian company, so much so that Nigerians take pride in the fact that their country is the second biggest Guinness market in the world, with ‘Nigerian’ Guinness now being exported to the United Kingdom.