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Coca-Cola SA to increase employees stake, black empowerment investors by 20%

Firetshepiso
By Firetshepiso | self meida writer
Published 29 days ago - 4 views

Coca-Cola Beverages South Africa (CCBSA) will increase the stake held by employees and black empowerment investors in the company to 20%, it said on Friday, in a bid to meet merger conditions laid out by competition authorities.

In 2014, the Coca-Cola Company and SABMiller Plc reached an agreement with the majority shareholder of a company that bottled Coca-Cola’s products to combine the bottling operations of their non-alcoholic beverages businesses in Southern and East Africa, which led to the creation of CCBSA’s parent company.

The parent company is Coca-Cola Beverages Africa.

The merger required the parties to increase black empowerment ownership of CCBSA, a government rule meant to reverse decades of economic exclusion of black people under apartheid.

Companies in South Africa are required to meet the rules of a scheme called Black Economic Empowerment (BEE) which allows black employees and investors to hold equity in the company. This makes a company more likely to qualify for government tenders.

The deal will see nearly 8 000 employees increase their current holding of around 5% in CCBSA to an approximate 15% shareholding, CCBSA Managing Director, Velaphi Ratshefola and Minister of Trade, Industry and Competition Ebrahim Patel said in a joint statement.

Adding to the company’s external BEE partners, the combined equity stake will be 20%, Patel said.

In June 2020, the company said every employee will receive an equal allocation of shares regardless of staff level, race or years of service.

CCBSA, a bottler for the Coca-Cola Company, will also be contributing R80 million ($5.39 million) per year for three years to the government’s localisation initiatives.

“We have also undertaken to collaborate with our sugar suppliers to increase the volume of sugarcane procured from black farmers.

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