Jubilant Bhartia Group Set To Acquire 40% Stake In Coca-Cola’s Bottling Arm For Rs 12,500 Cr – News18

The Bhartia family of Jubilant Bhartia Group is set to acquire a 40% stake in Hindustan Coca-Cola Beverages (HCCB), the exclusive bottling arm of Coca-Cola India, for Rs 12,500 crore, The Economic Times reported.

The formal announcement is anticipated later today, said people familiar with the developments.

Goldman Sachs has agreed to exclusively finance the special purpose vehicle (SPV) established for the acquisition of HCCB’s stake and will be partnering with the Bhartia family on the deal, the sources added.

Bhartia family to lead India’s beverage industry

The acquisition positions the Bhartia family as a major player in India’s beverage industry. Hindustan Coca-Cola Beverages, which manufactures and sells 37 products across eight categories, including soft drinks, juices, and energy drinks, has been a major revenue driver for Coca-Cola India.

India, Coca-Cola’s fifth-largest market by volume, is seen as a crucial growth area for the company, with its low per capita consumption of packaged soft drinks offering significant expansion potential.

The Bhartias opted for financing partnerships with Goldman Sachs to avoid over-leveraging their conglomerate. Goldman Sachs will later syndicate the investment to domestic mutual funds and foreign banks. Earlier, the family explored alternative financing options with Bain Credit, Apollo Global Management, and others.

Coca-Cola’s Asset-Light Strategy

Coca-Cola India is following PepsiCo’s asset-light model, aiming to create value through the sale of its HCCB stake. This sale could pave the way for an IPO, helping to establish HCCB’s valuation. PepsiCo had previously shifted its bottling operations to Varun Beverages, significantly boosting Varun’s market value, according to a report by The Economic Times.

HCCB Financial Performance

Hindustan Coca-Cola Beverages recently reported a 9.2% increase in revenue, totaling Rs 14,021 crore for FY24, along with a 247% year-on-year surge in net profit. The company also plans to invest $1.5 billion over the next five years to expand its bottling capacities and develop new facilities in Gujarat and Madhya Pradesh.