The Dabur Group is on a mission to expand its business portfolio, with a keen eye on acquiring a significant stake in Coca-Cola. The Burman family of Dabur and the promoters of Jubilant Group are reportedly prepared to purchase a 40% stake in Hindustan Coca-Cola Beverages (HCCB) for approximately ₹10,800-12,000 crores ($1.3-1.4 billion). This valuation places Coca-Cola India’s wholly-owned bottling subsidiary at an estimated worth of ₹27,000-30,000 crores ($3.21-3.61 billion).

Details From Reports

According to insiders involved in the negotiations, the bidding process for the deal took place last week. The parent company, Coca-Cola, will decide whether one or two co-investors will become part of the agreement or if a coalition of investors will be formed following negotiations. The final decision on this deal is expected to be reached by the end of the current financial year.

Inquiries and Interests

A media report from June 18 indicated that Coca-Cola has reached out to Indian business conglomerates and the family offices of billionaire promoters about investing in HCCB. This branch is one that the company aims to publicly list in order to capitalize on the rapidly growing domestic capital markets. Among the contacted entities were the family office of Pidilite Industries’ Parekh and the promoter family of Asian Paints, alongside the Burman and Bhartiya families.

Interest from Prominent Groups

It’s suggested that the family offices of Kumar Mangalam Birla, Sunil Bharti Mittal, and tech magnate Shiv Nadar also received inquiries. However, only the Burman and Bhartiya families have expressed interest in placing bids for the stake. This wealth-rich family is open to a structure that could integrate their listed flagship companies – Dabur India and Jubilant Foodworks (JFL). They aim to leverage their existing fast-moving consumer goods (FMCG) and food portfolios to enhance synergies through potential co-investors.

Understanding the Business Landscape

Jubilant Foodworks, one of India’s largest food service companies, holds exclusive franchises for well-known brands such as Domino’s Pizza, Dunkin’ Donuts, and Popeyes in India. The company also has franchises for Domino’s in five other Asian markets and has acquired a major coffee retailer in Turkey. Meanwhile, Dabur boasts an extensive portfolio of food, beverages, and health-focused products, making both entities synergistic partners in this potential deal.

Expert Opinions on the Deal

An industry official stated that while Coca-Cola aims to unlock the potential of packaged beverages in India, there are suggestions that they should be offering additional shares in HCCB, with some voicing their grievances directly to Coca-Cola’s management. Nevertheless, Coca-Cola is actively searching for prominent business partners to finance this substantial deal. Representatives from Coca-Cola have remained tight-lipped regarding inquiries, and a spokesperson for Jubilant’s family office declined to comment. The Burman family was also unavailable for remarks.