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  August 10th, 2015 | Written by

Coca Cola’s European Bottlers to Merge Operations

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  • Coca-Cola began an overhaul of its bottling operations last year amid sliding consumer demand for soft drinks.
  • Coca-Cola European Partners will improve service through more consistent product and market strategies.
  • Coke CEO: The creation of a unified bottler in Western Europe “represents an important step in our system’s evolution."

Three European Coca-Cola bottlers have said they will to merge their operations into a single entity covering Western Europe.

The proposal combines Coca-Cola Enterprises (CCE), which serves eight countries, with Coca-Cola Iberian Partners (CCIP) — operating in Spain, Portugal and Andorra — and Coca-Cola Erfrischungsgetranke AG (CCE), Germany’s largest bottler.

Operating under the name Coca-Cola European Partners (CCEP), the new combined operation “will leverage and build on the best practices from each respective market and bottler to improve service to customers and consumers through a more consistent strategy for product development and market execution across Western Europe,” said Muhtar Kent, chairman and CEO of the new venture’s Atlanta, Georgiaheadquartered parent.

With more than 50 bottling plants and approximately 27,000 associates, CCEP will serve a consumer population of over 300 million in 13 countries across Western Europe, including Andorra, Belgium, France, Germany, the UK, Iceland, Luxembourg, Monaco, Norway, Portugal, Spain, Sweden, and The Netherlands.

Coke purchased Coca-Cola Enterprises for $12 billion in 2010 and began an overhaul of its bottling operations last year amid sliding consumer demand for soft drinks. The company expects pre-tax savings from the merger to total up to $375 million within three years of closing.

The creation of a larger, unified Coca-Cola bottling partner in Western Europe, said Kent, “represents an important step in our global system’s evolution.”

Coke intends to sign a 10-year agreement with the new company, with the first four years set at current prices. The parent company would also have the option of renewing for an additional 10 years.

Coca-Cola Enterprises shareholders will own 48 percent of the new company, while Coca-Cola Iberian Partners and The Coca-Cola Company will own 34 percent and 18 percent, respectively.

The respective Boards of Directors of the three new partners have approved the merger, which is subject to approval by CCE’s shareowners, receipt of regulatory clearances and other customary conditions. The merger is expected to close in the second quarter of 2016.