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Coca-Cola to buy 29% stake in RI unit
Coca-Cola Co
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oca-Cola Co. will help out Australian affiliate Coca-Cola Amatil Ltd. by taking a minority stake in a struggling Indonesian unit for US$500 million.
Coca-Cola Amatil's Sydney-listed shares rose 5 percent after its United States backer agreed to take the 29.4 percent holding which effectively values the Indonesian business at $1.7 billion, Reuters reported from Sydney on Thursday.
While sales volumes have jumped in Southeast Asia's largest economy, the unit's first-half earnings before interest and tax plunged 83 percent to A$5.2 million on rising costs and unfavorable currency rates.
Coca-Cola Amatil has also been under increasing pressure to improve earnings across the board after annual net profit slumped more than 80 percent and warning that it expects another profit decline in the current financial year.
Under new Chief Executive Alison Watkins, Coca-Cola Amatil ' which is itself 29 percent owned by the US Coca-Cola Co. ' has been undertaking a strategic review to address changing tastes of its core Australian market.
It is launching a smaller, cheaper Coke can and promising more sugar-free products which are due to hit the market in April.
