The companies will combine their bottling operations to serve more than 300m consumers in 13 Western European countries. These include Germany, Spain, Great Britain and France - the four largest markets for RTD beverages in the region.
The new entity – which will be headquartered in London – will help the bottlers compete more effectively and grow in its developed European markets thanks to a ‘world class production, sales and distribution platform.’
The merger, announced today, will create the world’s largest independent Coca-Cola bottler in terms of net revenues (combined company pro forma 2015 expected net revenues are $12.6bn and EBITDA of $2.1bn).
Coca-Cola European Partners will cover Andorra, Belgium, Iceland, Luxembourg, Monaco, Norway, Portugal, Sweden and the Netherlands, in addition to the four main markets of Germany, Spain, Great Britain and France.
10 year agreement
Coca-Cola is a global business operating on a local scale. The Coca-Cola system therefore consists of The Coca-Cola Company and more than 250 bottling partners across the world.
The Coca-Cola Company manufactures concentrates, beverage bases and syrups, selling these to bottling operations. Bottling partners manufacture, package, merchandise and distribute beverages.
Muhtar Kent, chairman and CEO of The Coca-Cola Company, said the formation of Coca-Cola European Partners was an ‘important step in the system’s evolution.’ It shows how Coca-Cola is adapting to meet the changing demands of the market, he added.
The Coca-Cola Company and Coca-Cola European Partners will start with a 10 year bottling agreement, with the chance to renew for another 10 years.
Sol Daurella, who is currently executive chairwoman of Coca-Cola Iberian Partners, will become chairwoman of Coca-Cola European Partners. John Brock, currently chairman and CEO of Coca-Cola Enterprises, will become CEO.
Damian Gammell, currently Beverage Group President and CEO of brewer Anadolu Efes (and previous CEO of Coca-Coa Erfrischungsgetränke) will become Coca-Cola Enterprises’ chief operating officer in the autumn, which will lead to the same position with Coca-Cola European Partners upon closing.
Manik Jhangiani, currently CFO for Coca-Cola Enterprises, will become the CFO of Coca-Cola European Partners.
Coca-Cola Enterprises shareholders will own 48% of Coca-Cola European Partners on a fully diluted basis. Coca-Cola Iberian Partners will own 34% and The Coca-Cola Company will own 18%.