Coca-Cola Enterprises Inc., Coca-Cola Iberian Partners (CCIP) and the German Coca-Cola Association (CCE AG) have announced a merger, in one of the largest deals in the drinks company's history. The combined company will be worth around €28 billion, according to reports.
The bottling and sales activities of the three companies are to be combined in a newly-created association, Coca-Cola European Partners (CCEP), which will be led by major shareholder Coca-Cola Enterprises (48%).
CCEP will supply 13 countries, and have an annual turnover of $12.6 billion. In Europe, it will reach around 300 million customers. The deal will generate cost savings of around $375 million within three years.
The merger is subject to antitrust approval. A decision is expected in the second quarter of 2016.
Commenting, Euromonitor Senior Global Beverages Analyst, Howard Telford said, "For Coca-Cola and its bottling partners, this move is all about efficiency and savings. Bottling is a capital intensive and expensive enterprise, and The Coca-Cola Co has embarked on a recent process of refranchising these operations to local subsidiaries, spending more of its focus and resources on producing concentrates and the global marketing of its brands."
Telford added, however, that this deal "is a much larger and exciting proposition, creating the largest independent bottler of Coca-Cola products, and a powerful new partner in Western Europe. The deal seems like an excellent fit for CCE's capabilities and expertise, bringing the high per capita soft drinks market of Germany under its umbrella, although a private label and discounter intensive grocery retail environment will present immediate challenges.
"The new entity will also take responsibility for the struggling but high potential markets of Spain and Italy, where there is room to generate per capita growth across soft drinks if economic recoveries take hold."
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Maike Baeumer. To subscribe to ESM: The European Supermarket Magazine, click here.