Coca-Cola Co. has agreed to buy Nigeria’s largest juice maker, accelerating its push into Africa and deepening its diversification drive in response to slowing soda sales.
Coke said Saturday it acquired an initial 40% stake in TGI Group’s Chi Ltd., which also sells dairy and snacks, and intends to buy the remaining 60% within three years. The deal values Chi at a little less than $1 billion, according to a person familiar with the matter.
The investment in Africa’s largest economy represents Coke’s biggest overseas acquisition since 2012, when it paid roughly $980 million to buy roughly half of Dubai-based Aujan Industries, a leading maker of juice and malt beverages in the Middle East.
The Atlanta-based beverage giant increasingly is targeting Africa for growth amid sluggish sales in more-developed markets. Coke said in 2014 it would invest $17 billion in the continent this decade with bottling partners, roughly three times as much as in the previous decade.
It also signals a redoubled effort to expand beyond core soda brands including Coke, Sprite and Fanta at a time when health authorities in many parts of the world are singling out sugary drinks for contributing to rising obesity and diabetes.
This week a World Health Organization commission recommended that governments consider special taxes on sugar-sweetened beverages, following the example of Mexico, which introduced levies on soda and junk food in 2014. The commission estimated the number of overweight children younger than 5 in Africa has nearly doubled to 10.3 million since 1990.
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