Coca-Cola Company TCCC said late Thursday that it expects to incur a non-cash impairment charge of approximately $1 billion during the fourth quarter of 2025. The charge is directly related to the company’s planned divestiture of a controlling stake in its African bottling operations, Coca-Cola Beverages Africa (CCBA).
The massive financial adjustment comes on the heels of the company’s recent agreement to sell a 41.52% stake in CCBA to Coca-Cola HBC AG (CCHBC), the Swiss-based bottler, which simultaneously acquired the remaining interest held by Gutsche Family Investments (GFI). The combined transaction grants CCHBC a 75% controlling interest in CCBA, valuing the African bottler at an equity value of roughly $3.4 billion.
The expected $1 billion charge is primarily an accounting measure, specifically driven by the reclassification of accumulated negative net foreign currency translation adjustments (CTA). These foreign exchange losses, which have been sitting in the company’s comprehensive income on the balance sheet, must be reclassified to income—and therefore recognized as a loss—upon the sale of the asset, according to regulatory filings.
While the impairment is a significant figure, the non-cash nature means it will not affect the company’s immediate cash flow or underlying business profitability, but it will reduce net income for the fourth quarter.
Strategic Shift in Africa
The sale represents a major step in The Coca-Cola Company’s long-term strategy to refranchise its bottling operations globally and shift its focus toward high-margin activities like brand building, marketing, and the production of concentrate. Once the transaction closes, TCCC expects its bottling investments, as a percentage of consolidated net revenue, to fall to approximately 5%.
For Coca-Cola HBC, the acquisition of CCBA—the largest Coca-Cola bottler on the continent—significantly expands its African footprint. The deal will add 14 new markets to CCHBC’s portfolio, positioning it to cover over 50% of the continent’s population and making it the second-largest Coca-Cola bottler globally by volume, after Coca-Cola FEMSA.
The transaction is subject to customary closing conditions and regulatory approvals and is currently targeted to close by the end of 2026. TCCC retains a 25% stake in CCBA, with CCHBC holding an option to acquire this remaining interest within a six-year period following the initial closing.
