Coca-Cola finalizes CCE transaction
October 5, 2010
The Coca-Cola Co., Atlanta, completed the acquisition of the North American operations of Coca-Cola Enterprises (CCE) and the sale of the company's Norway and Sweden bottling operations to CCE.
"Today begins the next era of winning for our North America system," said Muhtar Kent, Coca-Cola’s chairman and chief executive officer, in a statement. "With the completion of this transaction, we have redefined our operating model to best serve the unique needs of our flagship market, in full alignment with our 2020 Vision. Our thoughtful and disciplined planning efforts prior to completing the transaction will enable us to execute and quickly drive a seamless integration in North America, delivering enhanced value to our customers, consumers and independent bottling partners.
"Through CCE's acquisition of our bottling operations in Norway and Sweden, this transaction also further strengthens our franchise system in Europe by providing broader geographic coverage and optimized marketing and distribution leadership in this key geography. Across the globe, The Coca-Cola Co. remains committed to continuously evolving and advancing our franchise system in line with the unique needs of each and every market."
With the completion of the transaction, Coca-Cola has renamed the sales and operational elements of the North American businesses, Coca-Cola Refreshments USA Inc. (CCR) and Coca-Cola Refreshments Canada Co., which will be wholly owned subsidiaries of Coca-Cola and led by CCR President and Chief Executive Officer Steve Cahillane. CCR will integrate five business components into a bottling and customer service operation in both the United States and Canada. The five components formerly were: CCE North America, Coca-Cola North America (CCNA) Foodservice, the Minute Maid and Odwalla juice businesses, CCNA Supply Chain Operations and Coca-Cola-owned bottling operations in Philadelphia.
A newly reshaped CCNA, led by President Sandy Douglas, will provide franchise leadership and consumer marketing and innovation for the company's flagship market, it said.
"As former President of the North American Business Unit for CCE, Steve Cahillane is the perfect choice to lead Coca-Cola Refreshments," Kent said. "Together with Sandy Douglas, we have put in place a leadership team with the skills and experiences necessary to deliver sustainable growth in our flagship market."
Once fully integrated, Coca-Cola expects to generate operational synergies of at least $350 million per year. The company anticipates that these operational synergies will be phased in over the next four years, and that it will begin to fully realize the annual benefit from these synergies in the fourth year. Longer term, the integration will enable Coca-Cola to drive an optimized operating model and increased cash flow returns by investing its capital in a more efficient system.
While the company has not made any share repurchases during the current fiscal year, with the closing of this transaction, the Coca-Cola remains committed to repurchasing at least $1.5 billion in shares in 2010, it said.