Coca-Cola Is Paying $575 Million for Unilever’s Soy Drink Business
Coca-Cola and its largest bottler have agreed to acquire a soy-based beverage maker for $575 million, another big bet on an international brand by the soda giant.
In a deal that has already been approved by Coke’s (KO) board, Coke and Mexican-based bottler Coca-Cola FEMSA (KOF) are buying AdeS from Unilever. AdeS, which generated net revenue of $284 million last year, is the second largest global maker of soy-based beverages. It has a strong presence in Latin America, including in Brazil, Argentina, Uruguay and Paraguay.
The deal is the latest bolt-on acquisition by Coke as it hunts for growth abroad. Two other recent deals the soda giant has inked includes a $400.5 million deal to buy China Culiangwang Beverages Holdings last year and a minority investment in Chi Limited, a Nigerian dairy and juice beverage company. The deal for Chi was announced earlier this year.
Brian Smith, president of Coke’s Latin America group, said the AdeS deal would help the company’s portfolio add to its more nutritious offerings. That alludes to what Chief Executive Muhtar Kent told analysts earlier this month, when he said the Culiangwang and Chi deals were ways for the company to respond to evolving consumer preferences.
More broadly, the largest food and beverage companies in the U.S. have added to their portfolios through acquisitions, as many of their established brands face volume softness, particularly in Western markets.
It is notable to add that the deal for AdeS won’t move the needle for Coke too much. Across the company’s entire system, Coke sold 29.2 billion unit cases in 2015, while AdeS only sold 56.2 million last year.