Coca-Cola Bottling Co. Consolidated (CCBCC), Charlotte, N.C., announced that it has signed a non-binding letter of intent with Atlanta-based The Coca-Cola Co., to expand the company's distribution territory in northern Ohio.
The transaction proposed in the February 2017 Letter of Intent would provide exclusive distribution rights for CCBCC in territories located in and around Cleveland, which currently are being served by another Coca-Cola bottler. Coca-Cola Refreshments USA Inc. (CCR), a wholly-owned subsidiary of The Coca-Cola Co., plans to acquire the distribution business in these territories from that bottler immediately prior to selling it to CCBCC, the company says.
Since May 2014, CCBCC has expanded its distribution territory in parts of Delaware, Kentucky, Illinois, Indiana, Maryland, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia and purchased manufacturing facilities in Maryland, Ohio and Virginia, it says.
Under the February 2017 Letter of Intent, the CCBCC and The Coca-Cola Co. also have agreed that the distribution territory in northern West Virginia associated with CCR’s Wheeling and Fairmont, W.V., sales centers no longer will be part of the distribution territory expansion transaction. This previously was announced in a Feb. 8, 2016, non-binding letter of intent between CCBCC and The Coca-Cola Co., and will be transferred by The Coca-Cola Co. to another Coca-Cola bottler. CCBCC also is working toward definitive agreements with The Coca-Cola Co. for the remaining transactions described in the February 2016 Letter of Intent, including the expansion of distribution territories in parts of northern Ohio and the purchase of a manufacturing facility in Twinsburg, Ohio.
CCBCC also is continuing to work toward completion of the transactions contemplated by other previously announced definitive agreements and non-binding letters of intent with The Coca-Cola Co. and CCR, including the following:
- closing the remaining transactions contemplated by definitive agreements executed with CCR in September 2016 to acquire distribution territory in parts of Indiana, Illinois and Ohio and to acquire two manufacturing facilities in Indiana; and
- reaching a definitive agreement with CCR for the transactions described in the letter of intent dated June 14, 2016, for the exchange of distribution territory in the southern parts of Alabama, Georgia and Mississippi; a manufacturing facility in Mobile, Ala., for distribution territory in parts of Arkansas, southwestern Tennessee and northwestern Mississippi; and manufacturing facilities in Memphis, Tenn., and West Memphis, Ark.
CCBCC also is continuing to work toward a definitive agreement with Coca-Cola Bottling Co. United Inc., for the exchange of distribution territory in south-central Tennessee, northwest Alabama and northwest Florida for distribution territory in and around Spartanburg and Bluffton, S.C., as proposed in a previously announced letter of intent dated June 14, 2016 between CCBCC and Coca-Cola Bottling Co. United, it says.
The transaction, proposed in the February 2017 Letter of Intent, is subject to the parties reaching a definitive agreement, with a transaction closing expected to occur by the end of 2017, it says. There is no assurance that a definitive agreement will be reached or that the closing of the transaction contemplated by the February 2017 Letter of Intent will occur, the company adds. CCBCC will file a Current Report on Form 8-K with the Securities and Exchange Commission (SEC) with additional information regarding the proposed territory expansion transaction and certain other matters addressed in the February 2017 Letter of Intent that will be available on the SEC’s website at http://www.sec.gov and on CCBCC’s website at http://www.cokeconsolidated.com, it adds.
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