File picture: Mike Blake/Reuters

The Minister of Economic Development today announced that an agreement has been reached with The Coca-Cola Company on a package of conditions addressing public interest considerations in connection with its proposed acquisition of a 54.5% interest in Coca-Cola Beverages Africa (‘CCBA’) and the planned subsequent acquisition of the controlling  interest in CCBA by a new controlling shareholder. The commitments will be presented to the South African Competition Commission and Competition Tribunal as proposed public interest conditions for approvals of both proposed transactions, which were originally announced by The Coca-Cola Company on 21 December 2016.

Through this agreement, The Coca-Cola Company:

  • Re-affirmed its commitment to abide by all the merger conditions agreed with the South African Competition Authorities at the time of CCBA’s formation in 2016.

  • Agreed to ensure that the new controlling shareholder of CCBA, once finalised, will likewise agree to be bound by the CCBA Merger Conditions and the agreement reached with the South African Government.

  • Agreed to increase and maintain the black economic empowerment equity ownership at Coca-Cola Beverages South Africa to 30% by no later than 2021 in recognition of the imperative to drive transformation and inclusive economic growth in South Africa. This will replace the previously committed level of 20% to be implemented by 2021 and will include an appropriate level of worker/employee ownership.

  • Agreed to extend the commitment to maintain the level of CCBA employment in South Africa for a further three years from the conclusion of the planned acquisition of the controlling interest in CCBA by a new controlling shareholder.

In the Agreement, The Coca-Cola Company recognizes the value of driving CCBA’s operations from South Africa and recommitted that CCBA will remain incorporated and tax resident in South Africa and its head-office will remain located in South Africa.

It advised that it intends to take full advantage of South Africa’s deep capital markets, developed business infrastructure, and expansive local talent pool to maximise CCBA’s potential as a bottling operator. CCBA is committed to continue developing a pipeline of local South African talent for leadership positions at the management and corporate governance levels, with a particular focus on transformation.