The Coca-Cola Company has announced today that it will be investing US$500 million to accelerate Coca-Cola Amatil Indonesia’s (CCAI, a subsidiary of Coca-Cola Amatil) growth strategy in return for ordinary equity ownership interest of 29.4 percent.
The investment will support the accelerated expansion of CCAI’s, production, warehousing and cold drink infrastructure with the aim of ensuring long-term growth and success. The investment will also enable the business to broaden its product offering, and transform its route-to-market model to increase availability to the traditional trade, as well as broaden its customer base.
Under the agreement, CCA will retain management and operational control of CCAI, and the proposed new Board of CAAI will comprise three CAA nominees including the Chairman, and two nominees from the Coca-Cola Company.
CCA’s group managing director, Alison Watkins said that the investment marked an exciting development for both CCA and The Coca-Cola Company.
“With a population of more than 240 million and a fast-growing emerging middle class, Indonesia is a key growth market for CCA,” she said. “In partnership with the Coca-Cola Company, we have developed a plan to support up-weighted infrastructure and capability development to enable us to strengthen our market position for the long-term and generate returns above the cost of capital for CCAI.”
President of Coca-Cola International, Ahmet Bozet said, “This investment will allow us to capture the growth opportunity in one of the largest and most dynamic countries in the world as we enable our system to be even more responsive to consumer and customer needs.”
The agreement is subject to shareholder approval in addition to The Coca-Cola Company Board of directors’ approval, and the satisfaction of relevant Indonesian regulatory requirements.