Coca-Cola is getting ready for a big shift in how it runs its business in Africa but the move will not come cheap. 

The company has said it will take a huge financial hit of about $1 billion later in 2025 as it prepares to sell part of its ownership in Coca-Cola Beverages Africa (CCBA).

This money loss is known as an “impairment charge,” and it usually means a company believes the value of a business it owns has dropped lower than expected. In simple terms, Coca-Cola will not make as much money from the sale as it once hoped.

What is changing?

Coca-Cola HBC, a large Swiss-based Coca-Cola partner, has agreed to buy 75% ownership of CCBA for $2.6 billion. This deal values the entire African business at around $3.4 billion.

Once everything is completed, Coca-Cola HBC will become the second-biggest Coca-Cola bottler in the world, only behind the top player in Mexico. 

It will also gain a strong position in 14 African countries, making Africa a very important market for its future expansion.

Coca Cola’s strongfocus on Africa

Africa is one of the fastest-growing consumer markets in the world. The continent has a young and increasing population, and more people are able to buy packaged drinks every year.

Because of this, Coca-Cola HBC says it is not just buying the business, it is investing in Africa’s long-term future. The company even plans to list its shares on the Johannesburg Stock Exchange to show deeper commitment to the region.

Coca-Cola still keeps a foot in the door

Even after selling most of its ownership, Coca-Cola will not disappear from Africa. The company will still keep 25% ownership in CCBA. 

It also has the option to sell that remaining share within the next six years if it decides to fully leave production in the region.

Why is Coca-Cola selling?

Coca-Cola has been changing how it does business globally. Instead of owning factories and production plants, it prefers to focus more on building brands, marketing, and selling products. 

By handing over operations to bottlers, it can reduce costs and concentrate on what it does best selling drinks people love.

The company is still doing well overall. It recently reported strong profits from popular products like Zero Sugar and Fairlife milk in the United States, and good performance in some international markets.

Even though Coca-Cola’s long-term plan might work, the immediate effect will be painful and that is why the $1 billion hit matters. 

Big companies often take risks to grow in the future, and this move shows Coca-Cola believes Africa is a market worth betting on. But for now, stepping back from direct operations in Africa will cost a lot of money.