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  1. #1
    Join Date
    Jan 2009
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    Default TCCC in talks to buy CCE North America

    According to this Wall Street Journal article, The Coca-Cola Company is in talks to buy Coca-Cola Enterprises. Seems logical in light of the PBG deal. Should be an interesting few months as this develops. CCE's stock is up 26% in after hours trading after news of this broke.

  2. #2
    Join Date
    Jul 2002
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    Delaware
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    Default

    It's a mixed bag of news for me. On the one hand, if they merge CCE with their ownership in Philadelphia Coke, things in this area could change, and maybe they'd even build a distribution center/warehouse here (there are none in Delaware anymore, and the closest two are in Philadelphia and Baltimore). But on the other hand, they could take away work from the bottling arm, and send stuff through stores' warehouses instead of direct store delivery. Not to mention all the inevitable job losses.

  3. #3
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    Default

    I doubt they'd be shifting to warehouse instead of DSD any time soon. When they tried that with Wal-Mart and Powerade, the independent bottlers sued and were successful in stopping that. I don't know that merchandisers, account managers, and drivers would be affected too much since the routes still have to be sold, merched, and delivered, regardless of who owns the distribution center. CCE employees at the customer development center and at home office should be worried, though.

  4. #4
    Join Date
    Dec 2006
    Location
    Thomasville, NC
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    Default

    If this happens, it will certainly be a flip-flop of Coke's position.

    Still, as far as business goes, it's probably a smart move. It would certainly lead to job losses and changes in distribution, but it would also give Coke more control and allow them to cut costs.

  5. #5
    Join Date
    Nov 2000
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    312

    Default

    IMHO, this will make no real difference in what happens "on the ground" in terms of bottling. Other than in the Philadelphia area, its just one big company taking over another. In that particular area, of course, you do have contiguious territories now under common ownership and economies of scale might apply.

    On the business side, this is interesting. It makes KO a much larger company. In terms of debt, pension residual debt, number of employees, physical footprint on the ground and its accompyning liability, etc.

    One would expect a similar offer for CCBCC, which is likewise just a stock company. Actually KO already owns some of CCBCC's North Carolina territories, the result of a 1980s "war" between the two which was settled by KO leasing the areas to CCBCC. The remaining bottlers seem to be hardcore privatiers that have already turned offers from CCE down for years.

    Since this is limited to North America, one would assume that CCE - Europe (UK, France, Belgium) will either be spun off as a Euronext listed London or Paris based company, or merged into Helenic.

  6. #6
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    Delaware
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    Actually, the European operations would acquire operations in Germany, Norway and Sweden, and remain a public company.

    And the CCBCC territories you're referring to are part of the Piedmont Coca-Cola Bottling Partnership, which is now only minority owned by Coke (22.7%), and the rest owned by CCBCC.

  7. #7
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    Delaware
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    Default

    The deal isn't expected to close until the 4th Quarter of 2010. Here's the official website:

    COCA-COLA SYSTEM EVOLUTION

  8. #8
    Join Date
    Dec 2006
    Location
    Thomasville, NC
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    Default

    The folks at DPSG seem to like this development.

    Dr Pepper Soars on Speculation Coca-Cola to Pay Fees (Update2) - BusinessWeek

    From some of what I've read today, both Coke and Pepsi seem to have a long-term goal of moving away from direct distribution -- especially with large chain stores.

  9. #9
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    Delaware
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    If Pepsi paid $900 million, who knows what Coke will pay - they distribute more DPS volume than Pepsi. And I wonder if they'll have to give up any brands like Pepsi did - I know CCE has Dr Pepper, Schweppes, Canada Dry, Squirt, and Cactus Cooler in different areas.

  10. #10

    Default 1st post here hello!

    I work in cce vending and was wondering if anybody thinks the ko takeover will affect the full service (vending) side of the business.

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