Coca-Cola bottlers in Europe consolidate operations

COCA-COLA Enterprises, Inc. (CCE), Coca-Cola Iberian Partners SA (CCIP) and Coca-Cola Erfrischungsgetränke AG (CCEAG) will combine their businesses in a move that will trim down about $350 million to $375 million in cost within three years.

The new company, Coca-Cola European Partners Plc., which is to be incorporated in the UK and based in London, will in effect become the largest independent Coca-Cola bottler based on net revenues. It is expected to generate about $12.6 billion annually.

With more than 50 bottling plants and 27,000 associates, the company will serve over 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. The combined company will operate in Germany, Spain, Great Britain and France, the four largest markets for nonalcoholic ready-to-drink beverages in Western Europe.

Muhtar Kent, chairman and CEO The Coca-Cola Company, Sol Daurella, executive chairwoman of Coca-Cola Iberian Partners and John Brock, chairman and CEO of Coca-Cola Enterprises, Inc. toast the creation of Coca-Cola European Partners (Photo: Business Wire)

“The creation of a larger, unified Coca-Cola bottling partner in Western Europe represents an important step in our global system’s evolution,” said Muhtar Kent, chairman and CEO of The Coca-Cola Company. “We continue to adapt our business model to innovate, invest and grow along with the changing demands of the marketplace. With the strong leadership that will be assembled from across the three organizations, Coca-Cola European Partners will be well-positioned to deliver better and more effective service to customers throughout Western Europe and drive profitable growth across multiple beverage categories.”

Sol Daurella, executive chairwoman of Coca-Cola Iberian Partners, said “In 2013, we combined our family-owned Iberian Coca-Cola bottlers with over 60 years of history to better serve our customers and consumers. Our Iberian shareowners see today’s announcement as an important step to further develop and optimize our offerings in Western Europe. As the single-largest shareowner in this new business we will play a strong strategic role in Coca-Cola European Partners, while continuing to be close to our country, business, local consumers and customers. Combining our unique expertise in the on-premise channels, targeted marketing experience and operational excellence with the skills of CCE and CCEAG, together we will drive growth in Western Europe.”

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

Ms Daurella will become chairwoman of Coca-Cola European Partners and Mr Brock will become CEO. Both will be members of the Board of Directors.

Damian Gammell, the Beverage Group president and CEO of Anadolu Efes and a previous chief executive officer of CCEAG, will join CCE as chief operations officer later in 2015 and become chief operations officer of Coca-Cola European Partners upon closing. Manik Jhangiani, who is the chief financial officer of CCE, will become Coca-Cola European Partners’ chief financial officer and Víctor Rufart, currently general manager of CCIP, will become chief integration officer. Other members of the new executive team will be announced before the closing of the transaction.