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Coca-Cola acquisition accelerates its push into Africa

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By Tony Connelly, Sports Marketing Reporter

February 1, 2016 | 2 min read

Coca-Cola has acquired a minority stake in Nigerian juice and dairy company, CHI, as it looks to accelerate its push in Africa while expanding its portfolio with healthier alternatives to fizzy drinks.

Coke paid around $240m for a 40 per cent stake in the CHI, which is owned by TGI Group, with plans to purchase the remaining 60 per cent within three years. The deal will help the drinks giant strengthen its modest 3.5 per cent share of the Middle East and Africa’s fragmented $8.03bn juice market.

The move illustrates Coke’s efforts to confront the decline of its fizzy drinks amid widespread criticism of the sugar levels contained within them. It also gives the Atlanta-based beverage giant a platform to develop healthier alternatives in a region with one of the world’s fastest growing populations.

“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,” said Kelvin Balogun, president of Coca-Cola Central, East and West Africa, in a news release.

The Lagos-based company’s chairman, Cornelis Vink, told the Financial Times that the deal would see Coca Cola “put its leading still drinks brands on to the CHI platform and contribute its know-how in innovation, branding and operational efficiency

With Coke facing backlash in many of its key western markets its decision to triple its investment to $17bn in the content could help it recoup the losses. The drinks maker come under more pressure this week after a World Health Organization commission recommended that governments consider special taxes on sugar-sweetened beverages, following the example of Mexico, which introduced levies on soda and junk food in 2014.

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