The Coca-Cola Company (NYSE: KO) and Tropical General Investments Group (TGI Group) – the holding company of Chi Ltd, Nigeria’s leading dairy and juice company– today announced a binding agreement for The Coca-Cola Company to acquire an initial minority equity shareholding in Chi Ltd.
The agreement creates a strategic relationship between two beverage industry leaders within Africa’s largest economy that together serve Nigeria’s most popular sparkling soft drinks, juices, value-added dairy and water beverage brands.
Within the agreement, The Coca-Cola Company has made an initial 40 percent equity investment in Chi Ltd and intends to increase ownership to 100 percent within three years, subject to regulatory approvals, while working on other long-term commercial structures. Additionally, the parties have agreed to jointly discuss and explore other opportunities in the region to further develop this relationship.
The investment in Nigeria’s leading value-added dairy and juice beverage brands – which include Hollandia and Chivita –further expandsThe Coca-Cola Company’s West African portfolio of still beverages while establishing Coca-Cola’s presence in Africa’s high-growth value-added dairycategory. It will also allow both companies to leverage their respective investments and expertise to further drive innovation, optimize efficiency and strengthen route-to-market to accelerate growth and increase consumer availability and choice.
“For more than 30 years Chi’s leadership has built a greatly admired business that has quickly grown to become Nigeria’s leading producer and distributor of value-added dairy and juice products and we are delighted to enter the next phase of our growth journey together,” said Nathan Kalumbu, President, Coca-Cola Eurasia and Africa.
“Coca-Cola and Chi share the same commitment to Africa, to investing in our operations and to continuous innovation and our relationship will allow us to continue to provide Nigerian consumers the No. 1 beverage in each of the categories we serve,” said Kalumbu.
Cornelis Vink, Chairman of TGI Group and Chi Ltd, said they strongly believe in the journey they are starting with The Coca‑Cola Company as the relationship would allow them to expand their regional footprint and product portfolio.
“We stay firmly committed to growing our investments in the Nigerian economy, increasing employment and local content while supporting the communities we operate in. Chi will continue to provide its consumers with innovative products in the dairy, juices and snacks categories,” Vink said.
“We are immensely proud of the success that Chi has achieved in building the much-loved Hollandia and Chivita brands. We recognize the unique opportunity that the relationship with The Coca-Cola Company brings to further develop Chi as a strong regional company, building on the tremendous progress achieved to date,” said Rahul Savara, Group Managing Director of TGI Group.
Kelvin Balogun, President, Coca-Cola Central, East and West Africa, said the company has been investing in Nigeria for more than 60 years and the announcement represents the latest significant step in their commitment to growing their business and providing trusted beverage brands for Nigerian consumers and communities.
“We are extremely optimistic about Africa’s continued economic and social growth and recognize the importance of ensuring we stay one step ahead of evolving consumer tastes by broadening our portfolio and introducing new products. Today’s announcement positions both Coca-Cola and Chi well for future growth in what is an exciting time in the beverage industry in Africa,” said Balogun.
In 2014, the Coca-Cola Company announced an increased investment in Africa to a total of $17 billion from 2010 to 2020.
This investment, which is roughly three times the amount invested in the last decade, is funding new manufacturing lines, distribution capabilities and cold drink equipment while creating additional jobs and opportunities on the continent.
