BrandArena: Coca-Cola Expands in the Middle East

Thursday 15 December 2011

Coca-Cola Expands in the Middle East

Coca-Cola Company is buying roughly half of Aujan Industries Co., a big competitor in the Middle Eastern beverage market based in Saudi Arabia.

Bloomberg reports Coca-Cola "agreed to acquire about half of the equity in the beverage business of Saudi Arabia-based Aujan Industries in what the companies described as a $980 million transaction." In doing so Coca-Cola will acquire 50% of the Aujan entity that holds the rights to the Rani and Barbican brands and 49% of Aujan's bottling and distribution unit. The transaction is expected to close in the first half of 2012.

Reuters also reported that the deal would be the largest-ever investment by a multinational company in the Middle East's consumer goods sector. But not all of the Middle East will be graced with Coca-Cola's sugary sweet concoction - the deal excludes Aujan's Iranian manufacturing and distribution business.

The $980 million transaction that is expected to close in the first half of next year gives Coca-Cola 50 percent of Aujan and 49 percent of the company’s bottling and distribution revenue, Bloomberg reports. One part of Aujan’s business that Coke isn’t touching is its Iranian manufacturing and distribution business.

“The Middle East is a high-growth region with some of the highest rates of non-alcoholic ready-to-drink per-capita consumption,” Ahmet C. Bozer, Coca-Cola’s group president for Eurasia and Africa, said, according to Bloomberg. “This transaction creates a platform for further cooperation between Coca-Cola Co., Aujan and existing bottling partners across the region.”

When the close finally happens, one expects plenty of raised Barbicans.

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