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Coke Nears Buy of Most of Largest Bottler

Coca-Cola is close to a deal to buy Coca-Cola Enterprises' North American operations, a report says.

Updated with confirmation of the transaction



) --


(KO) - Get Free Report

has agreed to acquire

Coca-Cola Enterprises'


North American operations.

Coca-Cola's acquisition of the assets and liabilities of CCE's North American business includes consideration of Coca-Cola's current 34% equity ownership in CCE, valued at $3.4 billion, based upon a 30-day trailing average as of Feb. 24. In addition, consideration includes the assumption of $8.88 billion of CCE debt and all of the North American assets and liabilities. The deal should deliver over $4 billion in cash to CCE shareowners.

Under the deal, Coca-Cola will acquire CCE's entire North American business, which consists of about 75% of U.S. bottler-delivered volume and almost 100% of Canadian bottler-delivered volume. At the close of the transaction, Coca-Cola will have direct control over about 90% of the total North America volume, including its current direct businesses. The parties also have an agreement in principle to expand CCE's European business. Following completion of the transaction, it is expected that CCE will adopt a program to repurchase up to approximately $1 billion of shares and a policy of paying an expected annual dividend of 50 cents a share.

The deal follows


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transaction to buy its two largest independent bottlers. PepsiCo's deals to buy

Pepsi Bottling





are expected to close Friday.

Coke's strategy in the past has been to set up bottlers that are separate from the parent company. But PepsiCo's move puts pressure on Coke to follow suit to gain the same competitive advantages, such as delivery options, that PepsiCo is likely to reap, the



-- Written by Joseph Woelfel in New York.

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