Coca-Cola Buys N. American Bottling Operations

123jump.com Staff
25 Feb, 2010
New York City

Coca-Cola Company agreed to acquire North American bottling operations from Coca-Cola Enterprises Inc. CCE shareholders will receive $10 in cash and one share in a new entity with the European bottling operations only. Coca-Cola

[R]11:020 AM New York – Coca-Cola Company agreed to acquire North American bottling operations from Coca-Cola Enterprises Inc. CCE shareholders will receive $10 in cash and one share in a new entity with the European bottling operations only. Coca-Cola’ cashless transaction was valued at $12.3 billion.[/R]

Coca-Cola Company agreed to acquire bottling operations of Coca-Cola Enterprises Inc that values the deal at $12.3 billion and all debts.

The statement released by Coca-Cola said that the company will also assume $8.9 billion in debt and all assets and liabilities of its North American operations.

In cashless transaction the company will acquire 75% of U.S. bottler delivered volume and entire delivered volume in Canada. After the acquisition Coca-Cola will control 90% of total North American volume.

Coca-Cola Enterprises shareholders will receive $10 in cash and one share in new entity that will control operations in Europe. Coca-Cola will not have any stake in the newly formed entity which will retain its current name Coca-Cola Enterprises.

The Coca-Cola’s acquisition of all assets and liabilities of CCE''s North American business includes consideration of the current 34% equity ownership in CCE, valued at $3.4 billion.

In addition, consideration includes the assumption of $8.9 billion of CCE debt and all of the North American assets and liabilities, including CCE''s accumulated benefit obligation for North America of $580 million as of December 2009.

Coca-Cola Enterprises surged 27% to $24.18 in the early trading and Coca-Cola edged up a fraction.

Coca-Cola and Pepsi have been bringing back their bottling operations in their control as U.S. consumers reduce their soda consumption and prefer water and fruit juice and other beverages.

Both beverage companies have been diversifying their portfolio of beverages and are facing rising costs of packing and distributing.

Coca-Cola Enterprises also agreed to acquire for $882 million bottling operations in Sweden and Norway from Coca-Cola and will have the right to acquire 83% of its German bottling operations in the next 18 to 36 months.

Coca-Cola Enterprises will convert to a new company that will hold its European operations. Public shareholders will exchange each CCE share for a new share in the new entity and control 100% of the company.

After the transaction CCE will initiate stock repurchase program of $1 billion and pay annual dividend of 50 cents a share subject to board’s discretion.