CCEP and AEV join forces to acquire Coca-Cola Beverages Philippines for US$1.8 billion

21 Nov 2023 --- Coca-Cola Europacific Partners (CCEP) announces that, in collaboration with Aboitiz Equity Ventures (AEV), it has entered into a definitive agreement to acquire Coca-Cola Beverages Philippines, Incorporated (CCBPI) from The Coca-Cola Company (KO) for US$1.8 billion. The transaction is expected to close in the early part of 2024.

Per the collaboration’s Share Purchase Agreement (SPA), CCEP and AEV are set to acquire 100% of CCBPI. Terms of the agreement include a 60:40 split ownership structure. The split will leave CCEP with the majority share of CCBPI.

The agreement also includes comprehensive governance arrangements between CCEP and AEV, which the two companies say will ensure a structured and balanced management approach.

Strategic implications
According to CCEP, the acquisition represents more than just an expansion. Rather, the company says it is a strategic move and part of its long-term growth strategy.CCEP says the move will expand its presence in the API region.

Additionally, by joining forces with AEV, CCEP says it is gaining a foothold in an established and profitable business, while leveraging the growth prospects in the Australia, Pacific and Indonesia (API) region.

Moreover, the company says the transaction will help it to meet its sustainable growth objectives through the diversification and scaling operation and support development in the API regional, specifically in Indonesia.

Meeting sustainability trends
CCEP further reveals that the partnership and acquisition is not just a consolidation of market presence, it also represents its confidence in the beverage industry and showcases the company’s endeavors in sustainability — a key driver of innovation within the beverage industry, according to a recent interview with Univar Solutions.

Furthermore, Innova Market Insights’ data suggests that, despite rising inflation in 2023, many consumers said they were willing to pay more for what they value most, especially for products that align with consumers’ core values, such as sustainability and ethical development.

A long time coming
CCEP adds that the journey to the present definitive agreement began in August, with the signing of a non-binding letter of intent and term sheet, signaling the initial stages of the transaction.

Progressing through advanced discussions and comprehensive due diligence, the involved parties have now reached a decisive stage in the acquisition journey. The governance structure of the agreement has also been established, and the companies state that the business will be overseen by a board comprising five members, with a majority representation from CCEP.

Reflecting its status as the majority owner, CCEP will also appoint the CEO. CCEP also notes that the transaction is expected to have a modest impact in the near future, and the company aims to return to the top end of its Net Debt to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) range by the start of the fiscal year 2024.

Edited by William Bradford Nichols

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