CCI Approves Kandhari Global’s Acquisition of HCCB’s NAB Business in Gujarat & Diu

The acquisition represents a transfer of operational control from HCCB to KGBPL in these regions, subject to the oversight and stipulations outlined by the CCI.

The Competition Commission of India (CCI) has granted approval for the proposed acquisition of Hindustan Coca-Cola Beverages Private Limited’s (HCCB) North Gujarat and Diu operations by Kandhari Global Beverages Private Limited (KGBPL), a significant milestone in India’s beverage industry. The acquisition marks a strategic move by Kandhari Global to expand its regional presence and consolidate its bottling and distribution network.

About the Acquirer: Kandhari Global Beverages

Kandhari Global Beverages Private Limited is a well-established bottler licensed by The Coca-Cola Company (TCCC) and Schweppes Holdings Limited (SHL). Operating predominantly in the state of Rajasthan, KGBPL is responsible for the preparation, packaging, distribution, and marketing of a wide portfolio of non-alcoholic beverage (NAB) products, including carbonated soft drinks, fruit-based drinks, and bottled water.

This acquisition aligns with KGBPL’s long-term strategy to grow its operational footprint across the western region of India, further strengthening its logistical and distribution efficiencies.

The Target Business: A Slice of HCCB’s Western Operations

The "Target Business" in the proposed combination refers to HCCB’s NAB operations in North Gujarat and the Union Territory of Diu. HCCB, a leading bottling partner of Coca-Cola in India, operates a wide network of bottling plants and has played a pivotal role in shaping the soft drink market across the country.

The specific assets being acquired include infrastructure, supply chains, distribution channels, and workforce involved in preparing, packaging, and distributing Coca-Cola branded NABs in the defined geography.

Implications of the Acquisition

The acquisition represents a transfer of operational control from HCCB to KGBPL in these regions, subject to the oversight and stipulations outlined by the CCI. The green signal indicates that the deal does not pose any significant adverse impact on market competition.

Some key takeaways from the development include:

• Market Consolidation: The deal allows for better consolidation of Coca-Cola's bottling territories in western India under Kandhari Global’s management, which could translate into improved customer service, reduced duplication of resources, and a more integrated supply chain.

• Boost to Regional Distribution: With access to an expanded market, KGBPL is expected to ramp up its distribution capabilities, potentially leading to increased availability of Coca-Cola products in smaller towns and rural pockets of Gujarat and Diu.

• Employment and Operational Synergies: The merger of operations is likely to lead to cross-functional synergies in manpower, logistics, and procurement, while also safeguarding employment in the regions under transition.

Regulatory Scrutiny and Approval

The CCI’s clearance was essential under the Competition Act, 2002, which mandates scrutiny of large-scale combinations to prevent adverse effects on competition. After reviewing the impact of the proposed deal on the beverage market structure, the regulator found no major competition concerns.

The decision is consistent with CCI’s recent trend of supporting strategic acquisitions that drive market efficiency and operational alignment, especially when they are within the same business group or value chain.

Looking Ahead

The transaction paves the way for a more consolidated and streamlined Coca-Cola bottling model in India, which is gradually moving towards regional specialization among its key partners. KGBPL’s acquisition of the North Gujarat and Diu territories strengthens its strategic positioning, and may serve as a blueprint for similar regional realignments in other parts of the country.