Blog: Chris MercerCoke, CCE and Dr Pepper the dark horse

Chris Mercer | 25 February 2010

We've seen some fast-paced news days in our time on just-drinks, but today's Coca-Cola Co story is up there with the best of them.

Unlike the public tit-for-tat that precluded PepsiCo's deal to acquire its own major bottlers, Coca-Cola Co and Coca-Cola Enterprises (CCE) wrapped up their deal within 12 hours of the news breaking.

CCE and Coca-Cola Co did well to keep us all in the dark. Company officials spent the second half of 2009 actively briefing against a merger deal.

But, Coca-Cola Co CEO Muhtar Kent told analysts today that the two entered talks even before PepsiCo announced its own move.

CCE shares rocketed by more than a third today on news that shareholders will get some serious payback.

As we digest the deal, however, our eye has been caught by a dark horse lurking in the wings.

Enter Dr Pepper Snapple, which, via licence arrangements, is already pocketing $900m from the PepsiCo deal and looks set to reap another windfall from Coca-Cola Co and CCE, analysts believe.

With net sales looking up, Dr Pepper's prospects are looking a lot rosier for 2010 and into 2011.

Chris Mercer, Deputy Editor.


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