Coca Cola will now reclassify its financial statements from second quarter in 2019 to include CCBA as part of its continuing operations. It did not provide an explanation for the postponement of its re-franchising plans.
In a development that marks a change of strategy, Coca-Cola Co stated it has dropped its plans to re-franchise its Africa bottling business, Coca-Cola Beverages Africa (CCBA), and will instead retain its majority stake in the business, for the time being.
Earlier, the U.S. beverage giant had wanted to re-franchise the business as part of its global plan to divest its manufacturing and distribution assets in order to focus on its main beverage business and boost its margins.
“While we remain committed to the re-franchising process, we believe it’s in the best interests of all involved for Coca-Cola to continue to hold and operate CCBA,” said Coca-Cola in a statement.
Coca-Cola stated, it had discussed the revision of its plan with a number of potential partners.
Coca-Cola HBC and rival Coca-Cola European Partners were seen as potential buyers for the unit.
With the news reaching the market, Coca-Cola HBC’s shares took a downward march and were seen trading down by 7.4%.
In 2016, Coke had bought a majority stake in CCBA from Anheuser-Busch InBev SA. CCBA is Africa’s largest soft drink bottler, and has operations in dozens of markets including Tanzania, South Africa, Uganda and Kenya.
Coca Cola said, it would reclassify its financial statements from second quarter in 2019 to include CCBA as part of its continuing operations.