Aboitiz proposes Coca-Cola Philippines acquisition

MANILA, Philippines – Aboitiz Equity Ventures is keen on entering the branded consumer goods space, announcing plans to jointly acquire Coca-Cola Beverages Philippines, Inc.

In a disclosure sent to the Philippine Stock Exchange on Wednesday, AEV and Coca-Cola Europacific Partners PLC proposed to scoop up the soda’s giant 100% ownership in Coca-Cola Beverage Philippines for $1.8 billion.

“If completed, the proposed acquisition would build on AEV’s portfolio diversification strategy to enter the branded consumer goods space and on CCEP’s successful expansion into the Asia-Pacific region via its acquisition of Coca-Cola Amatil in 2021,” the disclosure read.

AEV noted that they were “well positioned” to support CCBP’s growth aspirations owing to synergies from its other segments.

Coke’s Philippine operations have 73 production lines and 19 plants.

The disclosure indicated that AEV teamed up with CCEP and entered a non-binding letter of intent with The Coca-Cola Company for the joint acquisition.

AEV expects the potential joint acquisition to close at the end of 2023.

The proposed acquisition will be on a debt-free cash-free basis, as AEV noted that the soda giant is intent on divesting from its bottling operations.

That said, AEV said the proposed sale is already in “advanced discussions” with CCEP, which could open the door for the acquisition of CCBP from The Coca-Cola Company. This would cover a 60:40 ownership structure between CCEP and AEV.

Aboitiz opined there is still “no certainty” that the deal could be completed, as the proposed joint acquisition needs to undergo due diligence, secure board approvals, and sign “definitive” agreements.

Luis Limlingan, head of sales at local brokerage Regina Capital, said there are still some snags if the acquisition pushes through.

“The major problem for Coca-Cola is still the high taxation of sugar and related products, which inflates operational costs,” he said in a Viber message.

“AEV might be able to provide some synergies with its units, like Pilmico, but AEV’s familiarity with the local politics will be the main advantage,” Limlingan added.

Shares in AEV ended trading 4.5% down at P52.05 apiece on Wednesday. — Ramon Royandoyan