Market research
Latin American Coca-Cola bottler Arca Continental is to set up a joint venture with US-based Coca-Cola Bottling Co United as the Coca-Cola Co continues its refranchising operations.
Coca-Cola Co first announced plans to refranchise its bottling system in 2013
The Coca-Cola Co will take a 20% equity stake in the newly-created Arca Continental Beverages Business. In exchange for the stake, Coca-Cola Co will contribute the Southwest operating unit of Coca-Cola Refreshments.
The Southwest unit includes territories in Texas and parts of Oklahoma, New Mexico and Arkansas. The new, US-based company will also include all of Arca Continental's existing beverage businesses in Latin America. Arca Continental will hold the majority stake and will continue to be publicly traded on Mexico's stock exchange.
As part of the deal, United will acquire from Coca-Cola the majority of remaining territory in Oklahoma, which will then be contributed, along with an undisclosed sum, to its US JV with AC Beverages.
Separately, Orzarks Coca-Cola Bottling Co has signed a letter of intent with Coca-Cola to acquire territories in northwest Arkansas and small areas in Kansas and Oklahoma.
"Arca Continental is a strong Coca-Cola bottler that has done a great job developing and sharing best practices in its long-standing history," said Coca-Cola North America president Sandy Douglas. "Arca Continental will be a tremendous partner with United in serving a major region of the US, and the companies will benefit from having contiguous borders for their territories. Coca-Cola is also pleased to gain an additional equity stake in an international bottler that is vital to our long-term success."
The JV will become a member of the National Product Supply Group (NPSG). The NPSG is governed by a board comprising representatives from its current members, which are Coca-Cola North America, Coca-Cola Refreshments, Coca-Cola Bottling Co Consolidated, Coca-Cola Bottling Company United and Swire Coca-Cola, USA.
The AC Beverages/United operation will own 11 cold-fill production facilities.
Coca-Cola first announced plans to return to a franchise model, instead of owning its bottlers, in 2013.
Sectors: Soft drinks, Water
Companies: The Coca-Cola Company
