This Conglomerate Wants to Buy Coca-Cola Philippines
Aboitiz Equity Ventures partnered with Coca–Cola Europacific Partners (CCEP) to jointly acquire Coca-Cola Philippines.
The food and beverage industry in the Philippines is one of the biggest contributors to the local economy as it brings about 23 to 24% to the country’s gross domestic product (GDP). This includes a massive market size of 4.23 billion liters that includes soft drinks as the leading beverage in the country.
Given the high demand for said beverage, billionaire-owned Aboitiz Equity Ventures (AEV) has partnered with Coca-Cola Europacific Partners (CCEP) in an attempt to buy Coca-Cola Beverages Philippines (CCBPI) to add to its portfolio of recent acquisitions. Together with its new partner, AEV will acquire full ownership of Coca-Cola Beverages Philippines for $1.8 billion (around PHP 102.43 billion) on a debt-free, cash-free basis.
In their announcement, AEV said, “AEV has signed a non-binding Term Sheet and is in advanced discussions with CCEP regarding a potential joint transaction, which may lead to the acquisition of CCBPI from TCCC, based on a 60:40 ownership structure between CCEP and AEV.”
The Acquisition Status
Upon completion of the acquisition, AEV will be well-positioned to support CCBPI in its aspired growth. Aside from that, the acquisition will also provide the buyers with active profitability and growth.
The acquisition is still subject to several conditions—including the completion of confirmatory due diligence, receipt of AEV and CCEP’s board approvals, and a document where the parties have both signed the definitive agreements.
Also, as of writing, there is still no certainty that the acquisition of CCBPI will be completed—as further updates will still have to be provided later on. However, the transaction is foreseen to be closed at the end of 2023.
Once the acquisition is complete, CCEP will have the majority of the ownership (60%) while the minority (40%) will be held by AEV. After that, the business will be governed by five members—three of them to be appointed by CCEP and two from AEV. The CEO will also be appointed by AEV.
What This Acquisition Matters for AEV
“The acquisition would build on Aboitiz’s portfolio diversification strategy to enter the consumer market through a highly profitable business with one of the best global brands,” said Sabin Aboitiz, President and CEO of AEV.
“It offers exciting learning experiences for Aboitiz on marketing, distribution, logistics, and operations,” he added.
Aside from this purchase, AEV is also open about its interest in financial services. This specifically applies to them being the biggest shareholder of the Union Bank of the Philippines which just acquired Citibank’s consumer banking services.
In a recent report from Forbes, the Aboitiz family continues to be one of the richest families in the Philippines with a net worth of $3.5 billion. Aside from Coca-Cola, the family also owns stakes in real estate, food manufacturing, and cement. They are also building their portfolio on infrastructure facilities like airports, cellular towers, and even data centers.
Oftentimes, major share acquisitions may impact the operations of a company drastically. However, it is by obtaining an established company like Coca-Cola Philippines that there may only be little changes in the organization and the operations. Overall, this may depend on what the new owners will suggest and whom they will appoint as the new CEO of this staple brand in the country.