Over the weekend, the Coca-Cola Company disclosed that it has invested 40 percent initial minority equity stake to acquire Chi Limited makers of Chivita fruit juice. The agreement creates a relationship between two leading beverage makers within Nigeria.
Chi Limited is one of Nigeria's foremost fruit juice and drinks manufacturer with sausage rolls also in its stables. They are the makers of Chivita and Beefie Roll, Hollandia Yoghurt amidst a host of other popular products. The company is owned by the TGI Group, an international investment and holding company with diversified interests and investments in Nigeria, Ghana, Republic of Benin, Morocco, UAE, South Africa, China and several other emerging markets.
According to official statement from the company, in order for Coca-Cola to acquire Chi, the deal has been structured in such a way that they are expected to increase ownership to 100 percent within three years and this would further increase the company's portfolio of beverages in West Africa.
Nathan Kalumbu, President, Coca-Cola Eurasia and Africa, said:
“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. Coca-Cola and Chi are the same in 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.”
Speaking about Coca Cola investment in Nigeria, Kelvin Balogun, President of Coca-Cola Central, East and West Africa explained that,
“Coca-Cola has been investing in Nigeria for more than 60 years and this announcement represents the latest significant step in our commitment to growing our business and providing trusted beverage brands for Nigerian consumers and communities,”
This news is coming on the heels of a lot of structural adjustments in corporations and bigger companies swallowing up smaller ones in mergers and acquisitions. In 2014, the Coca-Cola company raised its African investment to $17 billion to fund new manufacturing lines, distribution capabilities, create employment and opportunities on the continent.
But this investment can also be traced to a drop in the company's revenue as shown in their report for the third quarter of the year 2015. And more disturbingly, the recent global fall in the sale of cola and fizzy drinks backed by the increasing trend of healthy living and eating, #FitFam social media fitness culture and other fitness campaigns that demonized fizzy drinks.
Image Credit; Ton Koene
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