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Coca-Cola Bottling signs letter of intent to expand distribution network in Ohio and West Virginia

DBR Staff Writer Published 10 February 2016

Coca-Cola Bottling Co. Consolidated has signed a non-binding letter of intent (LOI) with The Coca-Cola Company to expand the latter’s distribution territory in Ohio and West Virginia and to acquire and operate a production plant in Twinsburg, Ohio, the US.

coca-cola LOI

With this LOI, the company would hold exclusive distribution rights in territories located within northern Ohio and northern West Virginia along with markets such as Akron, Elyria, Toledo, Willoughby, and Youngstown County in Ohio.

Currently, Coca-Cola Refreshments USA, which is a wholly-owned subsidiary of The Coca-Cola Company, caters to these regions and also operates the Twinsburg production facility.

The Coca-Cola Company chairman and CEO Frank Harrison said: "We are excited about this opportunity to expand our Company into additional markets.

"We are continuing to integrate recently acquired distribution territories and look forward to serving new customers, consumers, communities and employees in Ohio and West Virginia."

Recently, Coca-Cola Bottling Co has expanded its distribution network to include parts of Tennessee, Kentucky, Indiana, Virginia, Delaware and Maryland and is also working to close transactions related to additional distribution coverage in previously announced definitive agreement with The Coca-Cola Company from September 2015.

The Coca-Cola Bottling Co is also working to achieve proposed territory expansion, which was previously announced in the LOI from May 2015, which include regions such as Ohio, Indiana, Illinois and Kentucky.

In the recent past, the Coca-Cola Bottling Co has also completed the acquisition of Sandston manufacturing facility located in Virginia and is also planning to close transactions related to the acquisition of two other production facilities in Silver Spring and Baltimore in Maryland, in accordance with the definitive agreement entered into in October 2015.

The company is also working to proceed further for acquiring distribution right for manufacturing facilities located in Indianapolis, Indiana; Portland, Indiana and Cincinnati, Ohio.

The transactions proposed in this LoI are subject to the parties reaching definitive agreements, with transaction closings expected to occur in 2017. There is no assurance, however, that any definitive agreement will be reached or that the closings of the transactions contemplated by the LoI will occur.

In November 2015, Coca-Cola Bottling Co completed a transaction to expand its distribution territory to include Norfolk, Fredericksburg and Staunton in Virginia and Elizabeth City in North Carolina. It also signed a definitive agreement with an affiliate of The Coca-Cola Company to acquire manufacturing facilities in Sandston, Virginia and Baltimore and Silver Spring, Maryland, and an agreement with other bottlers to form a National Product Supply Group.

Image: Coca-Cola expands its distribution network across the US. Photo: Courtesy of The Coca-Cola Company.