Coca-Cola ditches plans to refranchise Africa bottling business

Shares in bottling company Coca-Cola HBC slumped on Monday after Coca-Cola Co. said it will keep its majority stake in Coca-Cola Beverages Africa "for the foreseeable future".

It had previously announced its intention to refranchise the business, which is the largest bottler of Coca-Cola beverages in Africa.

The group said it had held discussions with a number of potential partners and while it remains committed to the refranchising process, "it's in the best interests of all involved for Coca-Cola to continue to hold and operate CCBA".

"Coca-Cola Beverages Africa is a very important part of the Coca-Cola system, and we see great opportunities to create even more value," said president and chief operating officer Brian Smith.

Reacting to the news, Morgan Stanley said the market was likely pricing in some upside from a deal and it looks like M&A is off the agenda for now.

At 1500 BST, the shares were down 5.5% at 2,708p.