Coca-Cola completes $12.3bn bottling deal
The completion of the $12.3bn deal came after shareholders voted in favour and the Federal Trade Commission (FTC) gave its final approval on condition that a firewall be set up to protect the interests of Dr Pepper Snapple.
Reacting to the news, Muhtar Kent, chairman and CEO of the Coca-Cola Company said: “Today begins the next era of winning for our North America system. With the completion of this transaction, we have redefined our operating model to best serve the unique needs of our flagship market.”
Following the completion of the acquisition, the North American arm of CCE will become known as Coca-Cola Refreshments (CCR). It will operate as a wholly owned subsidiary of the Coca-Cola Company and will be led by Steve Cahillane, the former president of CCE.
Once the integration of CCR is complete, Coca-Cola expects to generate operational synergies of at least $350m per year. It is expected to take four years before these annual savings are fully realised.
While the North American operations of CCE became CCR, the European arm of the business has expanded. The Coca-Cola Company has just completed the sale of its bottling operations of Norway and Sweden to CCE.
“We have been working diligently to prepare for this day, and continue to believe that CCE has the financial flexibility, operational focus and leadership continuity to build on our success in these markets,” said John Brock, CEO of CCE.
Brock added that the confidence the company has in its European prospects is reflected in its recently announced long term financial goals. These include the aim to achieve revenue growth of 4 to 6 per cent and operating income growth of between 6 and 8 per cent.