Three Coca-Cola bot­tlers agree to merge

The Pak Banker - - COMPANIES/BOSS -

LON­DON: Co­caCola En­ter­prises (CCE.N), a Euro­pean soft drink bot­tler, is to com­bine with Co­caCola Ibe­rian Part­ners (CCIP) and the Ger­man bot­tling busi­ness of Coca-Cola Co (KO.N), the com­pa­nies said on Thurs­day, cre­at­ing the world's largest in­de­pen­dent bot­tler of Coke drinks by rev­enue, with busi­ness in 13 coun­tries.

The new com­pany, to be called Coca-Cola Euro­pean Part­ners, will have an­nual rev­enue of $12.6 bil­lion and earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­za­tion (EBITDA) of $2.1 bil­lion.

CCE's share­hold­ers will own 48 per­cent of the com­pany, with CCIP's share­hold­ers own­ing 34 per­cent. Coca-Cola, the world's largest soft drink maker, will own 18 per­cent. CCE share­hold­ers will re­ceive one share of the new com­pany, CCEP, and a one-time cash pay­ment of $14.50 per share. The new com­pany will be head­quar­tered and in­cor­po­rated in Lon­don and its shares will be traded on Euronext Am­s­ter­dam, the New York Stock Ex­change and the Madrid Stock Ex­change.

The com­bi­na­tion is ex­pected to re­sult in syn­er­gies of $350 mil­lion to $375 mil­lion within three years of clos­ing, helped by op­er­at­ing ef­fi­cien­cies, cost-sav­ings and scale ben­e­fits. The bot­tlers pur­chase soft drink con­cen­trate from Co­caCola Co, and then bot­tle and dis­trib­ute the drinks. The new com­pany will use its sav­ings to in­crease in­vest­ment in mar­ket­ing and sales. John Brock, cur­rent chief ex­ec­u­tive of CCE, will be CEO of the new group, while Sol Dau­rella, ex­ec­u­tive chair­woman of CCIP, will be chair­woman.

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