Coca-Cola has announced that it has bought a 40 percent stake in Nigerian juice and snack producer Chi Ltd, as part of its efforts to continue to expand in Africa to tap a young and fast-growing population.
The United States drinks giant bought the stake from unlisted TGI Group, the two companies said in a joint statement, but did not disclose the value of the sale.
Coca-Cola “intends to increase ownership within three years, subject to regulatory approvals while working on other long-term commercial structures”, the statement disclosed.
It already has a significant presence in Nigeria selling its fizzy drinks.
According to Reuters,Chi value remains at about $1 billion and Coca-Cola was paying a “triple-digit-million-dollar” amount for the stake.
Lagos-based Chi Ltd, whose owners had been considering a sale for some time, produces mostly fruit drinks, iced teas, snacks and dairy products. TGI is owned by a European family, according to industry sources.
“The parties have agreed to jointly discuss and explore other opportunities in the region to further develop this relationship,” the statement said, without elaborating.
In August 2014, Coca-Cola said it would invest $5 billion with African bottling partners in new manufacturing lines and equipment, as well as safe water access programmes, over six years.
Coca-Cola’s new investment deal is unfolding even as Nigeria is undeniably facing one of its worst economic crises in decades following sharp drop in oil prices which continues to hammer its currency.