Coca Cola sells 40% stake in bottling arm to Jubilant Bhartia Group

Global drinks firm The Coca‑Cola Co. will sell a 40% stake in Hindustan Coca‑Cola Holdings, the parent firm of Hindustan Coca‑Cola Beverages, its largest bottler in India, to the Jubilant Bhartia Group.

Both companies made the announcements in separate statements but did not disclose the financial details of the deal.

The stake is likely to be worth $1.47 billion, or about ₹12,500 crore, valuing The Coca-Cola Co.’s wholly owned subsidiary at $3.21-3.62 billion, or ₹27,000-30,000 core.

The stake sale points to a change in the India strategy of the maker of Limca, Sprite, Fanta, Thums Up, and its flagship Coca Cola, while also paving the way for the potential listing of the Indian firm.

The Economic Times had first reported in June that Coca-Cola, buoyed by a bullish domestic market, had reached out with an offer to buy into its Indian bottling arm.

Jubilant Bhartia Group’s Jubilant Foodworks holds the exclusive franchise for Domino’s Pizza, Dunkin’ Donuts, and Popeyes in India, and operates Domino’s in five other Asian markets. It also owns Coffy, a major coffee retailer in Turkey.

“The Jubilant Bhartia Group will bring invaluable experience and insights to our business as we continue to grow our presence in India,” Henrique Braun, president of international development for The Coca‑Cola Co., said.

“Jubilant Bhartia Group brings a track record of building and growing consumer and other businesses in India with international partners. They are also committed to investing in the communities they serve,” Braun said.

Shyam S. Bhartia, founder and chairman and Hari S. Bhartia, founder and co-chairman of the Jubilant Bhartia Group, said the investment is an ideal addition to their business.

“Together, we will leverage opportunities to grow the business to greater heights and ensure more Indian consumers can enjoy The Coca‑Cola Company’s refreshing portfolio of iconic local and international brands,” Bhartia said.

“With its diverse experience in various sectors, Jubilant brings decades of rich experience that will help accelerate the Coca‑Cola system, enabling us to win in the market and provide greater value to local communities and consumers,” Sanket Ray, president of the Coca‑Cola India and Southwest Asia operating unit, said.

The transaction is subject to regulatory approval. Rothschild & Co acted as exclusive financial adviser to The Coca‑Cola Company.

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

The company, which spent $1.9 billion last year on capital expenditure, plans to increase it by 15% to about $2.2 billion this year, lower than the 25% jump in 2023 from the earlier period, Coca Cola said.

Explaining the rationale for boosting its capacity in India, Coca-Cola chairman and chief executive officer James Quincey had earlier this year pointed out that the company is seeing “much more” growth in volume terms rather than price in the country.

Continuing to use HCCB for part of its local bottling, Coca-Cola is aiming to adopt a lighter asset model similar to Varun Beverages, the Indian bottler of the other drings giant PepsiCo, whose assets have tripled in value within two years.

PepsiCo had delegated its bottling operations to Varun Beverages, owned by Ravi Jaipuria.