Coca-Cola Consolidated announces agreement with Coca-Cola
Bottler will add Cleveland and Cookeville, Tenn., to territories
Coca-Cola Bottling Co. Consolidated, Charlotte, N.C., announced it has signed a definitive agreement with an affiliate of Atlanta-based The Coca-Cola Co. to expand the bottler’s franchise territory to include the Cleveland and Cookeville, Tenn., territories, which currently are served by Coca-Cola Refreshments USA Inc. (CCR), a wholly-owned subsidiary of The Coca-Cola Co. This agreement represents an additional phase of the proposed franchise territory expansion described in the previously announced Letter of Intent between the two companies. Coca-Cola Consolidated expects the transaction to close by the end of January 2015.
The bottler continues to work toward a definitive agreement with The Coca-Cola Co. for the remainder of the proposed franchise territory expansion described in the previously announced Letter of Intent, including Louisville, Paducah and Pikeville, Ky., and Evansville, Ind.
“We are pleased to announce the signing of a definitive agreement for another phase of our previously announced transaction with The Coca-Cola Co.,” said Coca-Cola Consolidated Chairman and Chief Executive Officer J. Frank Harrison III in a statement. “The signing of this definitive agreement represents one of the final steps in completing our expansion in the state of Tennessee, as the company will hold distribution rights in the significant majority of territory in eastern and central Tennessee upon completion of this transaction. We look forward to serving the Cleveland and Cookeville communities, including our customers, consumers and new employees there.”
The definitive agreement and other agreements to be entered into at closing will provide the bottler the exclusive rights to distribute brands owned by The Coca-Cola Co. as well as certain other brands not owned by The Coca-Cola Co. that currently are being distributed in the Cleveland and Cookeville territories by CCR. The transaction includes the purchase by the company of distribution assets and certain working capital items from CCR relating to these territories and the purchase of exclusive rights to distribute certain non-Coca-Cola brands in these territories. The transaction also includes the grant by CCR to the company of exclusive rights to distribute brands owned by The Coca-Cola Co. in these territories under a comprehensive beverage agreement to be entered into at closing. Under such agreement, Coca-Cola Consolidated will make a quarterly sub-bottling payment to CCR on a continuing basis after the closing for the grant of such exclusive rights. The company will not acquire any production assets from CCR and will, with certain exceptions, purchase finished goods from CCR to service customers in these territories.