Dabur Group is focused on expanding its business. The company is considering buying a major stake in Coca-Cola. Dabur’s Burmese family and Jubilant Group’s promoters Bhartia are set to buy a 40% stake in Hindustan Coca-Cola Beverages (HCCB) for Rs 10,800-12,000 crore ($1.3-1.4 billion). This values Coca-Cola India’s wholly-owned bottling subsidiary at Rs 27,000-30,000 crore ($3.21-3.61 billion).
What does the report say?
People associated with this deal told Economic Times that both parties submitted offers last week. The parent company, Coca-Cola Company, will decide whether one or two co-investors will participate in the deal or whether a consortium of investors will be formed after negotiations. The final decision on this deal is said to be taken by the end of this financial year.
According to a June 18 media report, Coca-Cola has approached a group of Indian business houses and family offices of billionaire promoters to invest in HCCB. This is an arm that it eventually wants to take public to benefit from the bullish domestic capital markets. Among those approached were the Parekh family office of Pidilite Industries and the promoter family of Asian Paints, as well as Burman and Bhartia.
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Only these two groups are interested
Some believe that the family offices of Kumar Mangalam Birla, Sunil Bharti Mittal and tech billionaire Shiv Nadar have also been approached. However, only Burman and Bhartia have attempted to bid for the stake. The cash-rich families are open to a structure that could also include their listed flagship companies – Dabur India and Jubilant Foodworks (JFL). It may join as a co-investor to leverage synergy with its existing portfolio of fast-moving consumer goods (FMCG) and food.
This is a company business.
JFL, India’s largest food service company, owns the exclusive franchises of Domino’s Pizza, Dunkin’ Donuts and Popeyes in India. The company also owns Domino’s franchises in five other markets in Asia and has acquired Koffee, a leading coffee retailer in Turkey. Dabur also has a broad portfolio of food and beverages, as well as health-focused products.
What do the experts say?
An official said that while Coca-Cola wants to unlock the potential of packaged beverages in India, some believe it should be offered an additional stake in HCCB and have expressed their displeasure to Coca-Cola management. But he said Coca-Cola is looking for major business partners to fund the big deal. Coca-Cola spokespeople did not respond to questions. A spokesperson for the Jubilant Family Office declined to comment. Burman was not available for comment.
