CCE may struggle to come to a deal over Coca-Cola's Germany bottling assets

Coca-Cola Enterprises (CCE) is in for a tough 2013, an analyst has warned, and remains unlikely to pick up an option to buy Coca-Cola Co's Germany operations.

Higher costs will hold back CCE's margins while weak trading in France and the UK will keep volumes flat this year, analyst Nomura said today (8 February). The comments contradict CCE head John Brock, who said yesterday he expects volumes to return to growth in 2013.

Nomura also said a difference in valuation of Coca-Cola's German bottling assets means the two companies will struggle to come to a deal before May, when CCE's option runs out.

Nomura added: “The company has not ruled out getting involved in other M&A, including the possible refranchising of the US, but none of this appears imminent.”

CCE may see opportunity in buying GlaxoSmithKline's Ribena and Lucozade, the analyst said. GSK yesterday said it is launching a “strategic review” of the brands, with “every option”, including a sale, on the table.

CCE posted its full-year results yesterday, logging a decline in profits and sales.