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The Coca-Cola Company, the world’s largest beverage manufacture, has struck a deal to acquire 40 percent of Chi Limited, Nigeria’s leading producer of diary and beverage products.

Coca-Cola, in a press statement released at the weekend, said it has entered a binding agreement with Tropical General Investments Group (TGI Group) – the holding company of Chi Limited – to acquire an initial 40 percent equity investment in Chi Limited with an option to increase ownership to 100 percent within three years.

Although the details of the deal were not disclosed, industry sources told Reuters last year that Chi was valued at $1 billion. In August 2014, Coca-Cola said it would invest $5 billion with African bottling partners to create new manufacturing lines and equipment over six years.

“Coca-Cola and Chi share the same commitment to Africa, to investing in our operations and to continuous innovation, and our relationship will allow us to continue to provide Nigerian consumers the No. 1 beverage in each of the categories we serve,” said Nathan Kalumbu, President, Coca-Cola Eurasia and Africa.
 
According to the statement, Coca-Cola and TGI Group also agreed to “jointly discuss and explore other opportunities in the region to further develop this relationship.”

“We strongly believe in this journey we are starting with The Coca Cola Company,” said Cornelis Vink, Chairman of TGI Group and Chi Limited. “The relationship will allow us to expand our regional footprint and product portfolio.” (TGI Group is an European investment company with diverse portfolio concentrated in emerging markets.)

The Coca-Cola Company has significant operations in Nigeria, selling its beverage brands in partnership with the Nigerian Bottling Company (owned by the Coco-Cola Hellenic Bottling Company).

Chibuike Oguh is Financial Nigeria's Frontier Markets Analyst