Why Coca-Cola Is Investing Nearly $1 Billion In A Huge Saudi ...

Coca-Cola announced today that it's buying around 50% of Saudi Arabia's Aujan Industries, one of the Middle East's biggest beverage companies, for $980 million, reports the AP.

And with the investment come big plans, for everyone involved.

Aujan hauled in $850 million in revenue this year, and it expects a surge to double that in just five years with Coke in the game.

Why's Coke spending all this money? Coke's president for Eurasia and Africa Ahmet Bozer cited two reasons in a statement (via Bloomberg).

• The Middle East has some of the highest rates of non-alcoholic consumption per-capita, and it's a high-growth region as well
• It'll be much easier for Coke to be able to get in with Aujan's bottling partners in the region

And Coke will inherit a portfolio of brands from Aujan. Some are particularly strong in the region, like its line of Rani fruit drinks and malt beverage Barbican.

There's a whole lot to gain for Aujan too. With Coke at its back, its global brand recognition is about to skyrocket. And, of course, there's that big money investment.

Coke decided to stay away from Aujan's Iranian business (it does both manufacturing and distribution there), which would have come with a bunch of US sanctions.

NOW SEE: Coke vs. Pepsi -- The Amazing Story Behind The Infamous Cola Wars >

Source: http://www.businessinsider.com/coca-cola-buys-aujan-middle-east-expansion-2011-12

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