On February 25, 2010, American soft drink giant, Coca Cola, announced that it is going to acquire the North American operations of its largest bottler, Coca-Cola Enterprises. For the last twenty four years, Coca-cola kept its bottling business separate from its soft-drink business. New York Times reports:
“We have a strong and unrelenting belief in our unique and thriving global bottling system,” Muhtar Kent, Coke’s chief executive, said in a statement. “Our new North American structure will create an unparalleled combination of businesses, which will serve as our passport to winning in the world’s largest nonalcoholic ready-to-drink profit pool.”
The deal marks the end of Coke’s idea of keeping its main operations — the development and marketing of the syrup concentrates that form the basis of its fizzy drinks — from the production and distribution of the end products.
It would be a “cashless deal” where the companies would take over their operations. Coke will take over the North American operations of C.C.E. In exchange, C.C.E would acquire the bottling plants in Norway and Sweden and focus on Europe. C.C.E would also gain 83% stake in Coke’s German bottling operation in the next three years. The deal is expected to be closed in the fourth quarter. Post closing, Coke will own about 90% of its American bottling operations.
Coke will give up its 34 percent stake in C.C.E. valued at $3.4 billion and would assume debts and other obligations of C.C.E worth about $9.5 billion. Coke’s Norwegian and Swedish bottling operation are valued at about $822 million.
