ABOITIZ Equity Ventures, Inc. (AEV) said on Wednesday that it plans to jointly acquire Coca-Cola Beverages Philippines, Inc. (CCBP), in partnership with Coca-Cola Europacific Partners PLC (CCEP) for $1.8 billion.
“AEV’s proposed acquisition of CCBP, with CCEP, offers a great opportunity to co-acquire an established, well-run business with attractive profitability and growth prospects,” it said in a regulatory filing.
The company said that along with CCEP, it had entered into a non-binding letter of intent with The Coca-Cola Co. to acquire 100% ownership of its local unit.
It added that the proposed acquisition would be at an enterprise value of $1.8 billion on a debt-free cash-free basis, in line with Coca-Cola’s intent to divest its bottling operations.
The company said the proposed transaction would result in CCEP taking majority ownership or 60%, with AEV owning the remaining 40%.
Once completed, the acquisition would build on the company’s diversification goals to enter the branded consumer goods market, it added.
“AEV would be well positioned to support CCBP’s growth ambition given the synergies that can be generated from [the company’s] other businesses,” it said.
The companies are expecting to close the transaction at the end of 2023, subject to the receipt of certain governmental and regulatory approvals, including clearance from the Philippine Competition Commission.
“There is, therefore, no certainty at this stage, that the proposed acquisition of CCBP will be completed, and as such, further updates will be provided in due course,” the company said.
AEV added that the proposed acquisition is also subject to the approval of the companies’ boards of directors, the signing of the definitive agreement, and the completion of the confirmatory due diligence.
During the second quarter, AEV posted an 18% decline in consolidated net income to P6.5 billion due to a P62-million non-recurring loss driven by foreign exchange losses from the revaluation of US dollar cash and liquid financial instruments.
In the first half, the company reported a net income of P10.5 billion, down 11% from P11.8 billion in the same period last year.
CCEP is one of the leading consumer goods companies in the world, serving 600 million consumers. It is listed on Euronext Amsterdam, the NASDAQ Global Select Market, London Stock Exchange, and the Spanish Stock Exchanges, trading under the symbol CCEP.
At the local bourse, AEV shares fell by 4.5% or P2.45 to close at P52.05 apiece on Wednesday. — Adrian H. Halili