Coke in $12.6bn bottling business deal

Coca-Cola said yesterday it was simplifying its manufacturing and distribution system in its home market with a $12.6bn deal that will give it direct control of 75 per cent of its US bottling and distribution business.

Coke's deal for the North American operations of Coca-Cola Enterprises, its largest bottler, mirrors PepsiCo's takeover, soon to be completed, of its two main US bottlers.

The deal, Coke said, would grant it greater flexibility and control over how it distributes sodas and other soft drinks to different retail and restaurant customers by creating a more unified system.

Muhtar Kent, Coke's chief executive, said the deal was an "evolution" of its relationship with its bottling organisation in the US, and was "in no way an about face".

Bill Pecoriello, an analyst at Consumer Edge Research, said the deal was "the right strategic move in our view", but that there were questions over whether Coke would keep control of the business in the long term or eventually sell it to another partner, such as Coca-Cola Femsa, its Latin American bottler.

Source : http://www.ft.com/cms/s/0/3df4bd2c-2277-11df-a93d-00144feab49a.html