Coca-Cola Philippines Set for $1.8 Billion Acquisition by Aboitiz

In an exciting development, Aboitiz Equity Ventures (AEV) is venturing into the branded consumer goods space with a bold announcement: a joint acquisition of Coca-Cola Beverages Philippines, Inc. (CCBP). According to a disclosure sent to the Philippine Stock Exchange on Wednesday, AEV, in partnership with Coca-Cola Europacific Partners PLC (CCEP), aims to acquire 100% ownership of CCBP. The price tag on this bubbling deal is A cool $1.8 billion.

This acquisition is part of AEV's portfolio diversification strategy. If completed, it will mark AEV's entry into the branded consumer goods industry while building on CCEPs successful expansion into the Asia-Pacific region. This is not CCEP's first fizzing partnership, with the company having acquired Coca-Cola Amatil back in 2021.

AEV believes they are “well-positioned” to support CCBP's growth aspirations. They cite synergies from their other business segments as a key strength. With Coke's Philippine operations boasting 73 production lines and 19 plants, AEV seems ready to quench its growth ambitions.

AEV and CCEP have already entered into a non-binding letter of intent with The Coca-Cola Company for this joint acquisition. The potential deal is expected to close at the end of 2023. Its worth noting that this acquisition will be on a debt-free, cash-free basis. This aligns with Coca-Cola's intention to divest from its bottling operations.

However, a potential speed bump on the acquisition highway is the proposed 60:40 ownership split between CCEP and AEV. The deal still requires due diligence, board approvals, and the signing of definitive agreements. While talks are in advanced stages, AEV states that there is still “no certainty” that the deal will reach completion.

Local brokerage expert Luis Limlingan warns of potential snags. High sugar taxes and related product taxes could inflate operational costs. Despite these potential obstacles, Limlingan notes that AEV could provide some synergies with its units, like Pilmico. Plus, AEVs familiarity with local politics could give it a sweet edge.

For more fizzy updates on the AEV and Coca-Cola acquisitions, download and install the WikiFX App on your smartphone via this https://www.wikifx.com/en/download.html. It's a simple way to ensure you stay in the loop with the latest business news.