Aboitiz Equity Ventures Inc. (AEV) on Monday said it has signed a definitive agreement with European firm Coca-Cola Europacific Partners Plc. (CCEP) to jointly acquire bottler Coca-Cola Beverages Philippines Inc. (CCBPI).
It will acquire the local Coke bottler from United States-based The Coca-Cola Co.
AEV said it hopes to close the deal during the first quarter next year.
CCBPI is the exclusive bottler and distributor of the Coke products in the Philippines and benefits from attractive profitability and growth prospects.
AEV will only own 40 percent of the local Coke bottler while 60 percent will be owned by CCEP.
It values CCBPI at $1.8 billion on a debt-free, cash-free basis.
“Final cash consideration will be subject to cash, debt-like items and working capital adjustments at completion of the transaction,” AEV said in a statement.
AEV will have to shell out $720 million (P40 billion) to cover its share of the deal.
“Shareholders’ agreement between CCEP and AEV with comprehensive governance terms will take effect at closing.”
AEV said it will need clearance from the Philippine Competition Commission.
“The proposed acquisition would build on AEV’s portfolio diversification strategy to enter the branded consumer goods space. AEV is well positioned to support CCBPI’s growth ambition due to the synergies which could be generated from AEV’s other business interests in the country,” it said.
“The proposed acquisition would also build on CCEP’s successful expansion into Australia, Pacific and Indonesia in 2021.”
Once completed, the two companies will gain a foothold in an operation that has a supply chain footprint of 73 production lines and 19 plants, which enjoys a strong customer base, servicing more than 1 million outlets.
The Philippines is Coca-Cola’s second largest market in Southeast Asia.
AEV reported that its income in January to September declined by 16 percent to P18 billion from last year’s P21.4 billion.
The company said it recognized non-recurring gains of P738 million for the period, lower than the previous year’s P5.3 billion.
Without these one-off gains, the company’s core net income during the period would have settled at P17.3 billion, an 8 percent increase year-on-year.
