Coca-Cola set to sell some bottling units to partners

04 November 2019

Coca-Cola is close to finalizing deals to sell part of its bottling operations in India to three franchise bottling partners, three officials directly aware of the developments said.

The combined value of the deals in the first phase of the selloff is estimated at Rs. 1,500-2,000 crore, one of the officials said.

“The company-owned Hindustan Coca-Cola Beverages (HCCB) is in final stages of negotiations to divest its plants to Moon Beverages, Ladhani Group, and the Kandhari Group,” another official said. “All three have been longstanding franchise bottlers of Coca-Cola India, and the size of the deals vary depending on the plant capacity and infrastructure.”

The deals are expected to be closed next month.

A Coca-Cola India spokesperson in an email revert said: “This news is speculative and as a matter of policy we do not comment on speculation.”

Officials at the independent franchise bottlers with whom Coca-Cola is in talks with could not be reached for comment.

The move to re-franchise bottling operations is in line with Coca-Cola’s global strategy to divest asset-heavy operations.

“Refranchising brings down fixed costs significantly since it reduces employee headcount and reduces built-in costs of distribution, leading to higher profitability,” one of the officials cited earlier said.