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Coca-Cola offers stake in bottling arm to top business houses

Soft drinks firm is aiming for an investment up to $1 billion for the minority stake

Coca-Cola offers stake in bottling arm to top business houses
[Source photo: Chetan Jha/Press Insider]

Coca-Cola India has reached out to the promoters of at least four top business families in the country to sell a significant minority stake in bottling business Hindustan Coca-Cola Beverages, The Economic Times reported.

The business houses include the Bhartia family that operates the Jubilant group which runs Domino’s chain of pizza outlets; the Burmans of Dabur; Fevicol-maker Pidilite Industries’ Parekh family and the promoters of Asian Paints.

The soft drinks giant is eyeing an investment up to $1 billion, the report said, citing company executives aware of the details, adding that it is not clear if the business houses will team up for the stake or act separately.

In the company’s earnings call in February, the drinks company said it recently completed the refranchising of a portion of its company-owned bottling operations in India to existing franchise bottlers.

India is the bottling giant’s fifth largest market globally. It has 11 franchise bottlers, including the company-owned Hindustan Coca-Cola Beverages. These bottlers operate 54 plants across the company.

The Atlanta-based drinks giant’s product profile in India includes Thums Up, Sprite, Fanta, Maaza, Kinley, and Minute Maid.

In India, Coca-Cola rival PepsiCo has fully outsourced its bottling operations to Varun Beverages Ltd, owned by billionaire Ravi Jaipuria.

Varun Beverages listed on the stock exchanges in 2016 and its stock value has more than tripled in the past two years.

Coca-Cola is looking to play out a similar approach to become asset light and also to gauge the value of the bottling business before it is listed, the report added.

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