The soft drinks giant, Coca-Cola, and French food and drinks combine, Danone, are thought to be close to announcing the formation of a joint venture to market and distribute several of Danone's bottled spring water brands in the US.

The speculation follows the agreement reached between the two companies in April for the marketing, sales and distribution of Evian, Danone's flagship water brand, in the US.

Coke would bring its distribution muscle and marketing know-how to the joint venture with Danone bringing a number of spring water brands bottled in the US. The joint venture operation is expected to have annual sales of around US$250m. However, neither Danone's major international brand, Volvic, which is produced in France, or Coca-Cola's own purified bottled water brand, Dasani, are expected to be included in the new operation.

The collaboration would shift the balance of power in the growing US bottled water market, with Coca-Cola potentially moving ahead of PepsiCo and putting itself in a position to challenge the clear market leader, Nestle. Neither Coca-Cola nor Danone has commented on the speculation.