Turkish beverage company Coca-Cola Icecek (CCI) has signed a deal to acquire Coca-Cola Bangladesh Beverages Ltd (CCBB) for $130 million.   

CCBB is one of the two bottlers in Bangladesh involved in the production, sale, and distribution of Coke brands in the country. 

As per the agreement, CCI will acquire 100 percent of CCBB shares at a net value of $130 million, or over Tk 1,400 crore, after subtracting the estimated net financial debt of the latter, according to a statement posted by CCI on its website yesterday. 

"The equity value will be subject to a post-closing price adjustment mechanism following the completion of a closing audit to determine the exact net financial debt amount of CCBB as of the closing date," it said. 

The acquisition is expected to be financed by CCI International Holland BV's (CCIHBV) existing cash resources and will have a modest impact on CCI's net leverage, added CCI. 

Officials at CCBB confirmed the development. The deal is expected to be closed following regulatory approval in Dhaka. 

In its announcement, CCI, together with its wholly-owned subsidiary CCIHBV and a subsidiary of The Coca-Cola Company, signed the deal. CCIHBV will be the main direct shareholder. 

CCBB is going to be transferred to the Istanbul-based company seven years after International Beverages Private Ltd (IBPL), Bangladesh, a subsidiary of The Coca-Cola Company, established the plant in 2017 in Bhaluka of Mymensingh, with an investment of $74 million and developed other infrastructure. 

Local firm Abdul Monem Ltd is another bottler of Coca-Cola beverages in Bangladesh, where the non-alcoholic ready-to-drink market registered a 10 percent compound annual growth rate in three years to 2022.  

Bangladesh's soft drink market, which is estimated to Tk 4,000 crore-Tk 6,000 crore, is catered by two US-based soft drink makers Coca-Cola and Pepsico, along with several local beverage makers such as Pran, Akij, and Partex. 

According to CCI, the non-alcoholic ready-to-drink market in Bangladesh is expected to register a 12 percent annual average growth in the decade to 2032. 

CCI manufactures, distributes, and sells brands of Coca-Cola and has operations in 11 Muslim-majority countries, namely Azerbaijan, Iraq, Jordan, Kazakhstan, Kyrgyzstan, Pakistan, Syria, Tajikistan, Turkey, Turkmenistan and Uzbekistan. 

In his comment, CCI Chief Executive Officer Karim Yahi said: "We are very pleased to sign the share purchase agreement to acquire CCBB, which we see as a great opportunity to enter a market with significant future potential, where growth and value can be generated by deploying CCI's core capabilities."  

"This acquisition also creates a more diverse geographical footprint for CCI and solidifies its alignment with The Coca-Cola Company." 

CCI, citing the forecasts by the International Monetary Fund, said Bangladesh's economy grew by an average of 6.5 percent annually between 2012 and 2022 and is expected to expand at an average annual rate of 6.7 percent between 2023 and 2028. 

CCBB serves about 10 crore consumers in the Rangpur, Rajshahi, Mymensingh, and Dhaka regions.  

With over 300 employees, one bottling plant, and three main warehouses, CCBB has around 3 lakh points of sale and partners with close to 500 distributors.  

Soft drinks account for most of CCBB's total sales, while the remainder of its product portfolio consists of the water category.  

In the past five years, the company has continuously strengthened its competitive position in Bangladesh to become the market leader in the soft drinks category with a 45.3 percent share as of 2023, according to CCI.