Coca-Cola Sells 40% Stake in India Bottling Business to Jubilant Bhartia Group

Coca-Cola has announced a strategic partnership with Jubilant Bhartia Group, selling a 40% stake in Hindustan Coca-Cola Holdings (HCCH) for ₹12,500 crore. This move is in line with Coca-Cola’s global refranchising strategy and strengthens its presence in India, its fifth-largest market. The deal marks a major entry into the bottling sector for Jubilant Bhartia Group, which will leverage its operational expertise from businesses like Domino’s and Dunkin’ to boost the growth of Hindustan Coca-Cola Beverages (HCCB), Coca-Cola’s largest bottler in India.

Deal Overview: ₹12,500 Crore Transaction

Coca-Cola has agreed to sell a 40% equity stake in HCCH, valuing the company at ₹31,250 crore. This will empower Jubilant Bhartia Group to significantly expand its portfolio in the fast-growing beverage sector in India. The Bhartia Group plans to finance the deal with a mix of its own funds and an investment from Goldman Sachs.

Strategic Refranchising and Growth Plans

This transaction is part of Coca-Cola’s global strategy to refocus its operations on an asset-light model, a move it has been pursuing through refranchising bottling businesses in various regions. The company previously reported net gains of $293 million from similar ventures, notably in India’s regions like Rajasthan and Bihar.

Key Financial Highlights of HCCB

For FY24, HCCB saw a significant 10.1% revenue growth, totaling ₹14,021.54 crore, while net profit tripled to ₹2,808.31 crore. The company manages over 60 beverage products, including major brands like Coca-Cola, Thums Up, and Maaza.

Synergies Between Partners

The partnership is expected to create synergies between Jubilant Bhartia Group’s experience in the food service industry, with brands like Domino’s and Dunkin’, and the extensive beverage distribution network of HCCB. This collaboration will focus on expanding market reach and fostering innovation in India’s expanding beverage market.

India’s Strategic Importance to Coca-Cola

India remains a key market for Coca-Cola due to its growing consumer base and significant potential for future growth. This strategic deal further solidifies Coca-Cola’s leadership in the Indian market while providing Jubilant Bhartia Group with a strong foothold in the bottling industry, poised for growth in the coming years.

Summary of the news

Key Point	Details
Why in News	Coca-Cola sold a 40% stake in Hindustan Coca-Cola Holdings (HCCH) to Jubilant Bhartia Group for ₹12,500 crore, valuing HCCH at ₹31,250 crore.
HCCB Revenue Growth	10.1% in FY24, reaching ₹14,021.54 crore.
HCCB Net Profit	Tripled to ₹2,808.31 crore in FY24.
Coca-Cola’s Strategy	Part of a global asset-light refranchising initiative.
Jubilant’s Funding Plan	₹4,000–₹5,000 crore from the group; remainder by Goldman Sachs.
HCCB Operations	Manages over 60 products, including Coca-Cola, Thums Up, Maaza.
India’s Rank for Coca-Cola	Fifth-largest market globally.
HCCB Regions	Operates primarily in South and West India.
Advisors for the Deal	Morgan Stanley (Jubilant Bhartia Group), Rothschild & Co (Coca-Cola).