Bhartia Family will Acquire a 40% Stake in Hindustan Coca-Cola

The Bhartia family, which owns the Jubilant Bhartia Group, is going to buy a 40% share in Hindustan Coca-Cola Beverages (HCCB), the bottling arm of Coca-Cola India, for Rs 12,500 crore.

This will be the family's biggest acquisition so far. The official announcement of the deal is expected later today, according to the report.

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The deal will be paid for using a combination of equity and debt. The Bhartia family, led by Shyam and Hari Bhartia of the Jubilant Group, will contribute Rs 5,000 crore, while the rest will be funded by Goldman Sachs. Goldman Sachs has agreed to finance the special purchase vehicle (SPV) set up for the deal.

This acquisition fits Coca-Cola’s strategy of focusing on its core business, similar to PepsiCo’s approach of outsourcing bottling to Varun Beverages Ltd. It also lets Coca-Cola benefit from the Bhartia family’s experience in the food and drink industry through Jubilant FoodWorks, which runs Domino's Pizza in India.

The acquisition happens as the Indian beverage market becomes more competitive, with HCCB aiming to grow its distribution network in smaller cities (Tier-II and Tier-III).

The Bhartias chose to partner with Goldman Sachs for financing to avoid taking on too much debt in their business. Goldman Sachs will later share the investment with local mutual funds and foreign banks. Previously, the family also looked into other financing options with Bain Credit, Apollo Global Management, and others

The company announced a 9.2% rise in revenue, reaching Rs 14,021 crore for the financial year 2023-24. It also reported a 247% jump in net profit, which totaled Rs 2,808.3 crore, according to a filing made to the Registrar of Companies last month.

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