It's hard to imagine a place on earth not overrun with Coca-Cola
Bloomberg reports Coca-Cola "agreed to acquire about half of the equity in the beverage business of Saudi Arabia-based Aujan Industries in what the companies described as a $980 million transaction."
In doing so, Coca-Cola will acquire 50% of the Aujan entity that holds the rights to the Rani and Barbican brands and 49% of Aujan's bottling and distribution unit. The transaction is expected to close in the first half of 2012.
According to Reuters, the deal would be the largest-ever investment by a multinational company in the Middle East's consumer goods sector.
But not all of the Middle East will be graced with Coca-Cola's sugary sweet concoction -- the deal excludes Aujan's Iranian manufacturing and distribution business.
Middle East beverage market
"The Middle East is a high-growth region with some of the highest rates of non-alcoholic ready-to-drink per-capita consumption," Ahmet C. Bozer, Coca-Cola's group president for Eurasia and Africa, said in the statement (via Bloomberg).
Coca-Cola's products will be closely tied with Aujan's other products in order to promote quick growth and popularity in the region.
The move to join forces with Aujan, one of the biggest companies in Saudi Arabia, is seen as a bid to catch up with arch-rival PepsiCo (PEP), which already has a sizable stake in the Middle Eastern market.
Interested in following the trends of the beverage industry? To help you along we list below the ten largest soft drink companies trading on the U.S. stock exchange.
Do you think any of these names are threatened by KO's expansion into the Middle East?
List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)
1. The Coca-Cola Company: Distributes, and markets nonalcoholic beverages worldwide. Market cap of $150.99B. The stock has gained 7.04% over the last year.
3. Coca-Cola FEMSA
4. Hansen Natural
5. Dr Pepper Snapple Group
6. Coca-Cola Enterprises
7. Coca-Cola Hellenic Bottling Company
8. National Beverage
9. SodaStream International
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
List compiled by Alexander Crawford. Kapitall's Rebecca Lipman and Alexander Crawford do not own any of the shares mentioned above. Data sourced from Finviz.
The Motley Fool owns shares of Coca-Cola and PepsiCo. Motley Fool newsletter services have recommended buying shares of Coca-Cola, SodaStream International, Coca-Cola Hellenic Bottling, PepsiCo, and Hansen Natural. Motley Fool newsletter services have recommended creating a diagonal call position in PepsiCo.
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