Dubai: Aujan, the Saudi-based beverage maker, is seeking to expand its manufacturing capacity and aims to double its annual revenue over the next five years, following a deal with Coca-Cola, the company's chairman told Gulf News.
The Coca-Cola Company is buying into Aujan Industries in a $980 million (Dh3.59 billion) deal announced yesterday. The transaction is expected to close in the first half of 2012.
Under the deal, Coca-Cola will acquire 50 per cent of the Aujan entity that holds the rights to Aujan-owned brands and 49 per cent of Aujan's bottling and distribution company. Vimto, a licensed brand, will remain with the Aujan-managed bottling and distribution company.
"Our brands are already present in 70 countries, and this new relationship will potentially take our brands to many more markets that Coke operates in around the world. This transaction also provides us with capital to expand our manufacturing capacity to meet growing demand for our brands like Rani and Barbican, and to further invest in our business," Shaikh Adel Aujan, chairman of Aujan, said in an emailed statement.
"We are confident that, supported by this new partnership, we will be able to double our current annual revenues, of more than $850 million, in the next five years," he said.
Aujan will leverage its brands regionally and internationally with Coke's "international expertise in research and development, marketing and distribution systems", he added.
Coca-Cola is expected to benefit from the Saudi company's distribution system.
"In addition to their great brands, we are investing in Aujan because it is a well-run, successful business. This transaction creates a platform for further cooperation between the Coca-Cola Company, Aujan and existing bottling partners across the region," said Ahmet C. Bozer, president of Coca-Cola Eurasia and Africa Group.
Aujan said he does not expect the transaction to have an impact on Aujan's product prices. The agreement excludes Aujan's Iranian manufacturing and distribution business.
Family control stays
Family-owned business Aujan will not undergo any management changes after the transaction is complete, RBS, the sole financial adviser to Aujan on the deal, said in a telephone statement.
"The current chairman and his executive board will remain at the helm of the company with no management changes expected in the immediate future," said Tom Emmet, head of corporate finance and equity capital markets at RBS, MEA, who led the deal on behalf of RBS. Asked about who would control the company, Emmet said: "The transaction today is a long-term partnership between Aujan and the Coca-Cola Company with appropriate and mutally agreed governance arrangements."
