Coca-Cola HBC Shares Dip 4% On African Acquisition, Q3 Trading Update

Core Viewpoint - Coca-Cola HBC's share price declined by 4% following the announcement of a significant acquisition in Africa and the release of third-quarter trading results [2][3]. Acquisition Details - Coca-Cola HBC has agreed to acquire a 75% stake in Coca-Cola Beverages Africa for $2.6 billion, with an option to purchase the remaining 25% later [3]. - The acquisition will create the second largest Coca-Cola bottling partner globally by volume, enhancing market positions in Africa and Europe [3][4]. - Funding for the deal will come from a €2.5 billion bridge financing facility and the issuance of shares to the Gutsche Family Investment Company, representing 5.47% of the enlarged entity [3]. Market Impact - Coca-Cola Beverages Africa operates in 14 African markets, accounting for approximately 40% of Coca-Cola's products sold on the continent by volume [4]. - The enlarged group is expected to represent two-thirds of Africa's total Coca-Cola system volume and cover over 50% of the continent's population [4]. Financial Performance - Coca-Cola HBC reported organic revenue growth of 5% in Q3, leading to a year-to-date growth of 8.1% [5]. - Organic volume growth was recorded at 1.1%, driven by the Sparkling and Energy portfolio, with organic revenue per case increasing by 3.8% year-on-year [5][6]. - Organic revenues rose across various territories, with established markets increasing by 1.2% and developing markets by 4.8% [7]. Product Performance - Sparkling volumes increased by 0.7%, while energy volumes surged by 34.3% due to new product launches [8]. - However, coffee volumes decreased by 34% as the company reduced its lower-margin retail channel [8]. Future Outlook - The acquisition is expected to close by the end of 2026 and is projected to boost earnings per share by low-single-digit percentages in the first full year post-completion [5]. - The company maintained its full-year guidance, anticipating organic revenue growth at the top end of a 6% to 8% range and organic EBIT growth at the upper end of a 7% to 11% band [9].