THREE huge Coca-Cola bottling companies in Europe are to cut costs by merging, as health-conscious and austerity-hit consumers shy away from sugary, fizzy drinks.
Coca-Cola Enterprises (CCE) will combine with German subsidiary CCEAG and Coca-Cola Iberian Partners (CCIP) to create Coca-Cola European Partners, which will have a value of €28bn (£20bn) including debt.
The group hopes the move will generate about $12.6bn (£8.12bn) per year and cut costs of up to $375m within three years.
CCE shareholders will own 48 per cent of the new company, CCIP will have 34 per cent, while Coca-Cola will hold 18 per cent.
John Brock, the current chief executive of CCE, will be chief exec of the new group, while Sol Daurella, executive chairwoman of CCIP, will be chairwoman.
“It’s a major milestone and major transaction that will benefit all parties involved,” said Coke chief executive Muhtar Kent on a conference call. “There’s no question we all believe that increased investment potential will lead to a better trajectory in terms of increased revenue growth going forward.
“This is not something that just came out of a hat. It’s an evolution of what you’ve seen in other parts of the world.”
CCE’s drinks include Coca-Cola in all its variations, Fanta and Capri-Sun. The company has reduced bottle sizes as customers cut back on the amount of fizzy drinks they consume.