The promoters of Bhartias appear to be taking the lead in securing a significant stake in Hindustan Coca-Cola Beverages (HCCB), Coca-Cola’s bottling subsidiary in India. According to a report by The Economic Times, the Bhartia family has outpaced the Burman family of Dabur in the race to acquire a large portion of HCCB.
Shyam and Hari Bhartia, who head the diverse Jubilant Bhartia Group, have recently locked in an exclusivity agreement with Coca-Cola to negotiate the purchase of up to a 40 percent stake in HCCB. This exclusive arrangement allows the Bhartias to explore the potential acquisition ahead of other interested buyers.
The deal, estimated to be worth between Rs 10,800 crore and Rs 12,000 crore (approximately $1.3 to $1.4 billion), aligns with Coca-Cola’s broader goal to transition to an asset-light business model. This approach mirrors a strategy previously adopted by rival beverage giant PepsiCo, which has offloaded its bottling operations to third-party partners.
Coca-Cola’s shift toward an asset-light model follows the successful example set by PepsiCo, which outsourced its bottling operations to Varun Beverages, owned by billionaire Ravi Jaipuria. Varun Beverages has seen its valuation increase nearly fourfold since May 2022, underscoring the potential advantages of such a strategy.
The sale of a stake in HCCB is also expected to set the stage for a potential public listing of the bottling company, contributing to better price discovery in the market. While discussions between Coca-Cola and the Bhartias are ongoing, no official statements have been made by either Coca-Cola, the Bhartias, or the Burman family.
Efforts to verify the details independently have not been successful, as none of the parties involved have responded to inquiries from The Economic Times or other media outlets. Sources with knowledge of the matter suggest that the Bhartia family has proposed more favorable terms than other competitors, positioning them as front-runners in the deal.
However, if negotiations fail to yield a finalized agreement within the stipulated time frame, the exclusivity period may be extended or other potential buyers could be invited to enter discussions. For several months, Coca-Cola has been working with financial advisory firm Rothschild to explore the sale of a stake in HCCB.
The deal has now reached advanced stages, and the final rounds of talks are expected to focus on defining the commercial terms, deal structure, and other critical aspects of the transaction. Coca-Cola is reportedly seeking a long-term partnership with a partner that brings generational capital, which is why the beverage giant has been in talks with family offices rather than private equity firms.
The Bhartias, who have a wide range of business interests through their conglomerate, are likely to make the investment through their family office. This strategy would allow them to avoid involving their quick-service restaurant chains or their global head offices in the deal.
By channeling the investment through their family office, the Bhartias could retain greater flexibility and control over the terms of their involvement in HCCB, further strengthening their position as a preferred partner for Coca-Cola in this landmark deal.
The Bhartia family, led by Shyam and Hari Bhartia, heads the Jubilant Bhartia Group, a diversified conglomerate with interests in pharmaceuticals, food services, agriculture, performance polymers, and consulting. Known for its innovative approach and strong leadership, the group has expanded globally, establishing a significant presence across multiple industries and contributing to India’s growing economy.
