Coca-Cola Co, the world’s biggest soda maker, is in talks to buy the North American operations of bottler Coca-Cola Enterprises Inc for almost US$15 billion including debt, said two people with knowledge of the discussions.
The sides may reach an agreement within days or the talks may fall apart, said the people, who declined to be identified because the negotiations are private. In the transaction under discussion, Coca-Cola would sell bottling operations in Scandinavia and Germany to Coca-Cola Enterprises, its largest bottler, the people said.
A purchase would follow PepsiCo Inc’s move to bring its bottling operations in-house as both companies try to reduce expenses and turn around the US market, where soft-drink volume sales have declined since 2005.
Coca-Cola chief executive officer Muhtar Kent has introduced new packaging and pricing for Coke in North America to draw customers in addition to cutting supply-chain costs.
Dana Bolden, a Coca-Cola spokesman, and John Downs, a spokesman for Coca-Cola Enterprises, declined to comment. The Wall Street Journal reported the talks earlier.
Coca-Cola and PepsiCo sell beverage concentrate and syrup to licensed bottlers, which add water and other ingredients, put the mixture in bottles and cans, and sell it. In 1999, PepsiCo followed Coca-Cola’s lead by spinning off its capital-intensive bottling operations to create Pepsi Bottling Group Inc. Coca-Cola currently owns about 34 percent of Coca-Cola Enterprises.
PepsiCo agreed in August to take control of its two biggest bottlers for about US$7.8 billion, allowing the soda maker to garner about US$300 million in cost savings and revenue.
PepsiCo’s takeovers of its bottlers, Pepsi Bottling Group and PepsiAmericas Inc, will give it control of about 80 percent of its North American beverage market.
The acquisitions are expected to be completed by the end of the first quarter, PepsiCo, based in Purchase, New York, said in a regulatory filing on Jan. 11.
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