MANILA -The Aboitiz Group is pushing deeper into the consumer segment of the market with a $720-million (P40 billion) investment in soft drinks giant Coca-Cola Beverages Philippines Inc.
Aboitiz Equity Ventures (AEV) said on Monday it signed a definitive agreement with partner Coca-Cola Europacific Partners Plc. to jointly buy Coca-Cola Philippines from US-based The Coca-Cola Co. in a deal worth $1.8 billion.
The Philippine power, banking and food conglomerate will take 40 percent of the venture, which marks its biggest investment in the consumer sector after Aboitiz-led Union Bank of the Philippines completed the P72 billion takeover of Citi Philippines assets in 2022.
The P265 billion AEV is in the midst of a major makeover to diversify its once power, banking and food-focused businesses to include consumer, infrastructure and technology.
Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said the acquisition of well-known names like Coca Cola and Citi would also create a “branding effect” for the group as it pursues its diversification.
“They are going through this diversification while establishing themselves as big player in these [major] brands,” he told the Inquirer.
“It’s also a portfolio realignment for Aboitiz. They’re evening up the risks,” he added.
Coca-Cola Philippines, previously controlled by conglomerate San Miguel Corp. before the company switched owners several times since the 1990s, will help Aboitiz rapidly build up its presence in the branded consumer goods space.
“Softdrinks is a good lucrative business. Despite challenging times people will still drink soft drinks so it’s inflation-proof,” Ravelas said.
According to Aboitiz, Coca Cola Philippines is the leading beverage supplier in the Philippines, with a wide supply chain footprint consisting of 73 production lines and 19 plants.
The deal, subject to closing conditions, including the approval of the Philippine Competition Commission, is expected to be completed by the first quarter of 2024, AEV said.
“AEV is well positioned to support [Coca Cola Philippines’] growth ambition due to the synergies which could be generated from AEV’s other business interests in the country,” the conglomerate said.
It also cited opportunities for Coca-Cola Europacific Partners, the world’s largest independent Coca-Cola bottler, following its expansion into “Australia, Pacific and Indonesia in 2021″.
AEV said the acquisition will be paid in cash upon closing. It had cash and equivalents of P113 billion as of end-September this year, its latest financial report showed.
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