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Three European Coca-Cola bottlers agree to merge in $27bn deal

DBR Staff Writer Published 07 August 2015

Coca-Cola Enterprises, Coca-Cola Iberian Partners (CCIP) and The Coca-Cola Company subsidiary Coca-Cola Erfrischungsgetränke (CCEAG) have signed a $27bn merger agreement to form a new company, creating the largest independent Coca-Cola bottler.

deal

The new bottler, known as Coca-Cola European Partners, will have more than 50 bottling plants and approximately 27,000 associates.

Expected to serve over 300 million consumers across 13 countries in Western Europe, the Coca-Cola European Partners would realize approximately $350m-$375m of annual run-rate pre-tax synergies within three years of closing, Coca-Cola Enterprises noted.

The Coca-Cola Company CEO and chairman Muhtar Kent said: "With the strong leadership that will be assembled from across the three organizations, Coca-Cola European Partners will be well-positioned to deliver better and more effective service to customers throughout Western Europe and drive profitable growth across multiple beverage categories."

The new company will continue to invest, employ, manufacture and distribute locally to generate significant synergies, including supply chain benefits and operating efficiencies.

The UK-based Coca-Cola European Partners will be 48% owned by CCE while Coca-Cola Iberian Partners and The Coca-Cola Company will own 34% and 18%, respectively.

Coca-Cola Enterprises CEO John Brock said: "We look forward to bringing together our world-class supply chain and sales team with the distinct strengths offered by CCIP and CCEAG to capture additional growth opportunities in each market."

The proposed merger, which is subject to CCE shareowners approval, receipt of regulatory clearances and other customary conditions, is planned to be completed in the second quarter of 2016.

Separately, a new 10-year bottling agreement will also be signed between The Coca-Cola Company and Coca-Cola European Partners.

The deal will have provision to renew for an additional 10-year period and a initial four-year incidence pricing agreement to extend economic current terms, the company said.


Image: Official of Coca-Cola Enterprises, Coca-Cola Iberian Partners and Coca-Cola Erfrischungsgetränke. Photo: courtesy of Coca-Cola Enterprises.