NEW YORK (TheStreet) -- Coca-Cola (KO) shares are rising 0.5% on Friday to $39.44 following Thursday's announcement of a major reorganization that includes a move to the a franchise model in North America and the departure of its Americas chief.
The reorganization includes a plan to split the North American portion of the company into two units, Coca-Cola North America and Coca-Cola Refreshments. The strategy behind the plan is to move the company to a franchise model in the U.S. In the franchise model, the company will partner with independent bottling firms to distribute its product throughout the country.
Coca-Cola Refreshments will serve as the bottling operations in North America, and will become part of the company's Bottling Investments Group. Coca-Cola North America will continue producing the actual beverage. While the company moves to a franchise model, Coca-Cola it seems will still retain control over production from beginning to end.
The split will go into effect on Jan. 1.
Also part of the reorganization is the departure of Steve Cahillane, once considered a possible successor to CEO Muhtar Kent. The departure leaves the president of Coca-Cola International, Ahmet Bozer, as the No. 2 within the company. Bozer will see his responsibilities expanded to include Latin America as part of the reorganization.
TheStreet Ratings team rates COCA-COLA CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about its recommendation:
"We rate COCA-COLA CO (KO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."