In the wake of recent acquisitions and stake buyout talks, Coca-cola has decided to take full control of Nigeria’s Chi Limited, through an extension of its previous minority investment in the natural juice brand.
The global beverage company bought a 40 percent stake in Chi in 2016 from Tropical General Investments – Chi’s holding company – and expressed that it would increase the ownership within three years. Coca-cola keeps its word, and now, the House of Chi is under the auspices the global brand.
“Coca-Cola is continuing to evolve as a total beverage company, and Chi’s diverse range of beverages perfectly complements our existing portfolio, enabling us to accelerate expansion into new categories and grow our business in Africa,” said Peter Njonjo, president of the West Africa business unit of Coca-Cola.
“We will support the Chi management team in building on the company’s remarkable heritage and achievements while using the scale of the Coca-Cola system to replicate their success in more markets across Africa.”
Chi Limited is a Lagos-based brand that was founded in 1980. It currently produces juice under the auspices of the Chivita brand, Capri Sonne and value-added dairy under the Hollandia brand. According to a previous comment by Njonjo, the company’s drive to diversify its product range would afford it some flexibility.
“We realize that in certain pack formats you can only go down so low. But once you start looking at pouches and still products, like juice and drinking yogurts, that allows you to start accessing much lower price points,” he said.
“Affordability will start becoming a bigger issue in this market than it was in the past. As a company, that is what we need to factor in as we are thinking about the future of our business in Nigeria.”
The recent transaction is sequel to a spike in acquisitions performed by the Coca-Cola Company 2018’s second half, which includes deals for sports drink brand Body Armor, UK coffee chain Costa, Australian kombucha drinks maker Mojo, French fruit beverage brand Tropico and Australian firm Made Group.
November, James Quincey, Coca-Cola CEO, said all the deals form part of the firm’s strategy of becoming more consumer-centric.
Quincey highlighted the reasoning behind the company’s mergers and acquisitions, including filling gaps in its beverage portfolio or entering emerging categories; building capacities across its supply chain, such as ingredient or equipment solutions, or digital reach; as well as pursuing different priorities in each region of the world.