Pizza makers to buy stake in Coca-cola, Rs 125000000000 deal by…, prepares to take loan from…
GH News January 24, 2025 01:06 PM
The Jubilant Group active in industries ranging from pizza chains to pharmaceuticals is set to acquire a 40% stake in Coca-Colas Indian unit for Rs 12500 crore. However to finalize the deal Jubilant plans to secure loans from mutual funds high-net-worth individuals (HNIs) and retail investors according to the report by Moneycontrol.
On December 11 the Bhartia family promoters of the Jubilant Group announced a strategic agreement to acquire this stake through Jubilant Beverages Limited. The acquisition targets Hindustan Coca-Cola Holdings (HCCH) the parent company of Hindustan Coca-Cola Beverages Private Limited India’s largest Coca-Cola bottler.
Jubilant Funding Strategy
While Jubilant has secured a credit line of Rs 12500 crore (approximately $1.45 billion) from the U.S.-based Goldman Sachs the group plans to raise additional funds from domestic markets to ease financial pressure. Moneycontrol citing sources reported that Goldman Sachs has offered to underwrite the deal. However the agreement allows Jubilant promoters to explore other funding sources.
Jubilant intends to raise Rs 4000–Rs 5000 crore through a mix of debt and equity by tapping into domestic lenders mutual funds HNIs and family offices. Any funds raised domestically will reduce the loan amount drawn from Goldman Sachs.
Significance Of Acquisition
This acquisition is pivotal for the Jubilant Group as it aligns with their strategy to expand their footprint in India’s lucrative beverage market. The deal will position Jubilant as a key player in one of Coca-Cola’s largest global markets.
The move reflects a combination of strategic foresight and financial ingenuity marking a significant step forward for the Jubilant Group’s ambitions in India.
Shapoorji Pallonji Group Similar Strategy
This isn’t the first instance of a company leveraging domestic markets for significant funding. In July 2023 the Shapoorji Pallonji Group raised Rs 14300 crore through non-convertible debentures (NCDs) from various investors to support its business expansion. Jubilant’s approach mirrors this strategy showcasing a growing trend of companies diversifying funding sources for large-scale deals.