Merged Coca-Cola bottlers expect millions in supply chain savings

9 August 2015

A merger of three Coca Cola bottlers is expected to result in the new company saving hundreds of millions in supply chain and operating costs.

Coca-Cola Enterprises (CCE), Coca-Cola Iberian Partners (CCIP) and Coca-Cola Erfrischungsgetränke (CCEAG) are to combine to form Coca-Cola European Partners.

The new company will have expected net revenues of around $12.6 billion (£8.1 billion). Coca-Cola Enterprises said the deal was expected to generate substantial synergies, resulting in realised annual run-rate pre-tax savings of around $350-375 million (£226-242 million) within three years.

The combined company will have more than 50 bottling plants and serve more than 300 million consumers in 13 countries across Western Europe, including Andorra, Belgium, France, Germany, Great Britain, Iceland, Luxembourg, Monaco, Norway, Portugal, Spain, Sweden and the Netherlands.

Coca-Cola European Partners will continue to invest, employ, manufacture and distribute locally.

John Brock, chairman and chief executive of Coca-Cola Enterprises, said the creation of Coca-Cola European Partners would build on each bottler’s capabilities to create more efficient operations in their respective markets across Western Europe.

“We look forward to bringing together our world-class supply chain and sales team with the distinct strengths offered by CCIP and CCEAG to capture additional growth opportunities in each market,” he said. “This transaction offers clear synergies, along with the scale to better serve the needs of our customers and consumers in Western Europe, to become an even stronger partner to The Coca-Cola Company and create increased value for CCE’s shareowners.”

Coca-Cola European Partners will be incorporated in the UK, one of its largest markets, with its headquarters in London. The combined company will be publicly traded with listings on the Euronext Amsterdam, the New York Stock Exchange and the Madrid Stock Exchange.

In support of the plan, The Coca-Cola Company and Coca-Cola European Partners will enter into a new 10-year bottling agreement with an option to renew for an additional 10-year period.

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