Coca-Cola has bought a 40 per cent stake in Nigerian juice and snack producer Chi Ltd, it said on Saturday, as it continues to expand in Africa to tap a young and fast-growing population.

The US drinks giant bought the stake from unlisted TGI Group, the two companies said in a joint statement, but did not disclose the value of the sale.

Coca-Cola "intends to increase ownership within three years, subject to regulatory approvals while working on other long-term commercial structures", the statement said.

It already has a significant presence in Nigeria selling its fizzy drinks.

One industry source said Coca-Cola was paying a "triple-digit-million-dollar" amount for the stake. Sources told Reuters last year Chi was valued at as much as $1 billion.

Lagos-based Chi Ltd, whose owners had been considering a sale for some time, produces mostly fruit drinks, iced teas, snacks and dairy products. TGI is owned by a European family, according to industry sources.

"The parties have agreed to jointly discuss and explore other opportunities in the region to further develop this relationship," the statement said, without elaborating.

The investment comes as Nigeria faces one of its worst economic crises for decades as a slump in oil prices has eroded public finances, hammered its currency and hit consumer sentiment.

In August 2014, Coca-Cola said it would invest $5 billion with African bottling partners in new manufacturing lines and equipment, as well as safe water access programs, over six years. – Reuters