SABMiller, Coca-Cola's South African Bottling Merger Negotitaion Excellent For Jobs and Businesses

SABMiller and Coca-Cola have just struck a deal with the government of South Africa to help finalize a long-pending merger of their bottling operations in some parts of Africa.

Coca-Cola have originally agreed with the London-based company to merge their assets in bottling facilities in November 2014, along with the privately held Gutsche Family Investments to form a joint venture that spans 12 African states and around 40 percent of the soda company's soft-drink volumes on the black continent.

SABMiller, which has approved its acquisition by Anheuser-Busch InBev NV, is set to hold 57 percent of the newly established Coca-Cola Beverages Africa. The American-based company will get 11.3 percent while the rest of the stakes will be given to Gutsche, which is also a major shareholder in the African bottling division of Coke.

The agreement entered into by both companies with the South African government will create jobs and provide access to approximately $27 million or 400 million rand development funds. This will ensure antitrust approval for the establishment of bottling facilities for non-alcoholic beverages in eastern and southern Africa.

The resulting merger will keep total permanent employment at present levels for a three-year period, said the multinational brewer and beverage company in a statement made on Wednesday.

A portion of the funds will be ploughed into agriculture development and another part will be earmarked for the development of retailers owned by citizens who suffered discrimination during the apartheid period, according to the company.

"The agreement between the merger parties and the South African government is expected to expedite the approval process," said the London-based brewing company.

Coca-Cola and SABMiller have initially agreed to a bottling merger in November 2014, but have encountered obstacles while attempting to gain anti-trust approval after Ebrahim Patel, Economic Development Minister of South Africa, intervened.

According to the London-based brewer, the new company will have its headquarters in South Africa as mandated by the government agreement.

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