Coca-Cola will sell a stake in its South African bottling unit to local investors for $669 million, in order for the beverages firm to comply with South Africa’s post-apartheid racial equity policies.
Coca-Cola also confirmed in a statement that the deal was a condition for its 2016 buyout of former partner SABMiller, now part of brewer Anheuser-Busch InBev NV.
South Africa’s government introduced policies that prescribe minimum holding in companies for Blacks and other groups that faced economic discrimination under the apartheid regimes. Some of those laws have raised controversy, especially with private investors, in a country where whites who make up just 11% of the population own 85% of the total wealth.
Coca-Cola Beverages South Africa said its broad-based black ownership will be increased to 20%, without giving detail on the value of the deal. Employees will have control of an approximate 15% stake, up from 5%, with the balance owned by foreign investors.
The plan was revised from an earlier proposal to sell a larger stake and has been agreed with regulators, a spokeswoman confirmed.
The broader Coca-Cola Beverages Africa is based in the coastal town of Port Elizabeth and serves 12 countries, including Kenya, Ethiopia and Ghana, according to the website. It accounts for about 40% of the Atlanta-based company’s drinks sold on the continent.
The value of the entire business is about $3.02 billion, the people said, meaning the new investors are getting a discounted price. The deal will help benefit employees and other partners as well as non-White investors, they said, though the exact structure is as yet unclear.