Jubilant Bhartia Group races for significant stake in Coca-Cola bottling arm: Report

Coca-Cola, in collaboration with advisor Rothschild, has been exploring the sale of HCCB for several months.

The promoters of the Jubilant Bhartia Group seem to be leading the race for a substantial stake in Coca-Cola’s India bottling subsidiary, Hindustan Coca-Cola Beverages (HCCB). According to a report by The Economic Times, the Bhartias have surpassed an offer from the Burman family of Dabur.

Shyam and Hari Bhartia, who lead the diversified Jubilant Bhartia Group, have recently secured an exclusivity agreement with Coca-Cola to negotiate the purchase of up to a 40 percent stake in HCCB, the ET report said. The deal, valued between Rs 10,800 crore and Rs 12,000 crore ($1.3-1.4 billion), is part of Coca-Cola’s strategy to implement an asset-light model similar to that adopted by rival PepsiCo. This move is expected to facilitate HCCB’s potential public listing and aid in price discovery.

PepsiCo has successfully outsourced its bottling operations to Varun Beverages, owned by billionaire Ravi Jaipuria, which has seen its valuation nearly quadruple since May 2022.

Despite the ongoing negotiations, Coca-Cola, the Bhartias, and the Burman family office have not responded to the ET queries. Moneycontrol has been unable to independently verify the details of the report. The Bhartias are reportedly offering more favourable terms compared to other bidders. If an agreement is not reached within the designated timeline, the negotiations may be extended or other potential buyers may be approached, the ET report added, citing people in the know.

Coca-Cola, in collaboration with advisor Rothschild, has been exploring the sale of HCCB for months. The final stages of negotiations are expected to clarify the deal structure, terms, and other commercial details. The beverage giant is seeking a long-term partnership with generational capital. It has been, accordingly, engaged with family offices rather than private equity funds.

The Bhartias are anticipated to channel the investment through their family office, rather than through their quick-service restaurant chains, to avoid involving their global head offices.