Saturday, 22 October 2016

COCA COLA TO TERMINATE AGREEMENT WITH DELTA

The Coca-Cola Company has given notice of its intention to terminate the bottler’s agreements with Delta Beverages and its associate Schweppes Holdings Africa Limited. This follows the combination of Anheuser-Busch InBev NV/SA (AB InBev) and SABMiller Plc. Delta and its associate Schweppes produce and sell TCCC brands under bottler’s agreements with TCCC.
 
“This Notified Intention has been given on account of AB InBev becoming an indirect shareholder in Delta Corporation Limited following the combination of AB InBev and SABMiller Plc,” said Delta in a cautionary statement. Delta said it was considering the ramifications of the notified intention which may have a material impact on the company’s business.

“No changes to the operations of the company and its associates are anticipated at this time, hence the company will continue to operate in the usual manner in the meantime.”

The group advised shareholders to exercise caution when dealing in the shares of the company and should consult professional advisers until such time as a further announcement is made. Delta gained 5,07c at the close of Zimbabwe Stock Exchange trades yesterday to 84,14c.

Analysts say that it is still too early to speculate on the direction the business will take as talks around the disengagement are still to start as this was just a notified intention but also noted that there are a lot of options which would not disenfranchise Delta shareholders
AB InBev is a key Pepsi Beverages bottler in Latin America while SABMiller dominated Coke’s bottling in Africa. Not only are Coca-Cola and PepsiCo global rivals, but international reports often speculate that Coke is one of the eventual takeover targets of the ever-acquisitive AB InBev.

Last year, the Wall St journal reported that Atlanta-based Coke has change-of-control clauses that would allow it to buy back SABMiller’s soda bottling and distribution assets or sell them to someone else.

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