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Japanese Coca-Cola bottlers agree to merge

DBR Staff Writer Published 03 October 2016

Japan's two major Coca-Cola bottlers have confirmed their plans to merge, creating what will be the third-biggest bottling entity in the worldwide Coca-Cola system.

The proposed merger of Coca-Cola West Co., based in Fukuoka Prefecture in southwestern Japan, and Coca-Cola East Japan Co. will create a new holding company, dubbed Coca-Cola Bottlers Japan (CCBJI).

The new company, which is expected to be established on 1 April 2017, will serve about 86% of Coca-Cola drinks sold in Japan and 110 million consumers.

It is anticipated to generate revenue of around 1tn yen ($10bn) based on the combined 2015 results of its parent companies.

The new company is also expected to make up for the cost synergies of approximately JPY20bn ($1.9bn) inside three years of closing of the merger deal.

Coca-Cola West president and representative director Tamio Yoshimatsu said: “The new CCBJI brings together the know-how and best practices of CCW and CCEJ, the two largest bottlers in Japan, who have driven bottler consolidation in their own regions to establish a competitive market advantage.

“We will work closely with Coca-Cola Japan to enhance brand value, grow our value share and further refine our Revenue Growth Management (RGM) strategies and execution, thereby contributing to growth of the industry. We will continue to evolve as a company of excellence, providing top-notch corporate value to all stakeholders.”

The new bottling company will be headquartered in Tokyo with registered address in Fukuoka.

It will operate in not only Tokyo but also in 37 other Japanese prefectures including Nagoya, Kyoto and Nagoya.

Board of directors of both Coca-Cola West and Coca-Cola East Japan have approved the business integration to take the merger forward.

For the transaction to close, it would need shareholders of both the companies to approve as well as other regulatory approvals.

The new Coca-Cola Bottlers Japan would have Tamio Yoshimatsu as its representative director and president while Vikas Tiku will be representative director, CFO and general manager of transformation.

Image : Coca-Cola West (CCW) and Coca-Cola East Japan (CCEJ) announced a business integration to form a new Coca-Cola bottling company. Photo : courtesy of Business Wire.