The Coca-Cola Co., Atlanta, announced that it will acquire Coca-Cola Enterprises’ (CCE) North American business and expand the two companies’ collaboration in Europe. CCE has agreed to purchase The Coca-Cola Co.’s bottling operations in Norway and Sweden and to obtain the right to acquire its German bottler. The advancement of the partnership aligns with the Coca-Cola system’s 2020 Vision and drives long-term value for shareholders, the company said.
“Our 2020 Vision calls for decisive and timely action to continuously improve and evolve our global franchise system to best serve our customers and consumers everywhere,” said Muhtar Kent, chairman and chief executive officer of The Coca-Cola Co., in a statement. “Consistent with the 2020 Vision, our roadmap for winning together, we act today as an aligned system. We are not acquiring CCE, rather we are acquiring their North American operations, and they remain one of our key bottling partners with world-class management, financial and operational capabilities.”
The Coca-Cola Co. currently has a 34 percent equity ownership in CCE and will acquire CCE’s entire North American business. The business consists of approximately 75 percent of U.S. bottler-delivered volume and almost 100 percent of Canadian bottler-delivered volume. Upon conclusion of the transaction, Coca-Cola will have direct control over nearly 90 percent of the total North American volume, including its direct businesses.
In Europe, the companies have agreed that CCE will purchase The Coca-Cola Co.’s bottling operations in Norway and Sweden for $822 million. CCE also will have the right to acquire the 83 percent equity stake in the German bottling operations that The Coca-Cola Co. already owns, 18 to 36 months after closing, for fair value. The European entity will retain the name Coca-Cola Enterprises Inc.
“CCE remains the preeminent Western European bottler and a key strategic partner with The Coca-Cola Co.,” said John Brock, CCE’s chairman and chief executive officer, in a statement. “Our European business serves an attractive market with growing volumes and profit driven by rising per capita consumption. As such, CCE will have an improved profile with enhanced revenue, margins and EPS growth prospects.”
As part of the transaction, CCE will provide its shareowners, excluding The Coca-Cola Co., a special one time cash payment of $10 per share, which will total more than $4 billion, CCE’s Brock said. The companies expect the transactions to close in the fourth quarter of 2010.
Learn more about CCE in Beverage Industry's cover story on the company: " 2020 Vision."
Did you enjoy this article? Click here to subscribe to Beverage Industry