The Burman family, owners of Dabur, and the Bhartias, promoters of Jubilant Group, are nearing a deal to acquire a 40% stake in Hindustan Coca-Cola Beverages (HCCB) for a price range of ₹10,800-12,000 crore ($1.3-1.4 billion). This valuation places HCCB, Coca-Cola India’s bottling subsidiary, at ₹27,000-30,000 crore ($3.21-3.61 billion).
Negotiations have progressed with both parties submitting bids over the past weekend. Coca-Cola’s parent company will decide whether the deal involves one or two co-investors or potentially a consortium of investors. A final decision is expected by the end of the fiscal year.
Coca-Cola had earlier reached out to various Indian business families and billionaire promoters for potential investment in HCCB, with a long-term view of eventually taking the company public. Among those approached were the family offices of the Parekhs (Pidilite Industries) and the promoter family of Asian Paints. However, only the Burmans and Bhartiyas are actively pursuing bids.
Dabur and Jubilant are considering leveraging synergies with their existing fast-moving consumer goods (FMCG) portfolios by using their listed flagships, Dabur India and Jubilant Foodworks, as co-investors. Jubilant Foodworks is India’s largest food services company and holds exclusive franchises for Domino’s Pizza, Dunkin’ Donuts, and Popeyes in India. Dabur has a robust portfolio of healthy food and beverage products.
However, not everyone is on board with the proposed deal. Some independent bottlers have expressed dissatisfaction, arguing that they should be given the opportunity to acquire additional stakes in HCCB.
Coca-Cola aims to bring in prominent business partners to fund the transaction and adopt an asset-light business model, similar to rival PepsiCo’s successful outsourcing of bottling operations to Varun Beverages.
HCCB, which manages Coca-Cola’s local bottling operations in the south and west of India through 16 factories, reported a 40% year-on-year revenue increase to ₹12,840 crore in FY23, with profits more than doubling to ₹809 crore. The company’s continued growth in India, one of Coca-Cola’s top five global markets, positions it as a key asset for the Atlanta-based beverage giant.