Coca-Cola in talks to acquire part of its largest bottler for $12 billion: report

Coca-Cola, the world's largest soft drink maker is reportedly in talks with it largest bottler Coca-Cola Enterprises Inc. (CCE) to acquire its North American operations in a deal valued at as much as $12 billion.

Atlanta-Georgia-based Coca-Cola is following its arch rival Pepsico Inc.  which abandoned its earlier strategy of keeping its bottling operations separate from its main soft drink business in order to concentrate on marketing, sales and bringing out newer products. (See: Pepsi back in bottling business with $7.8-billion deal) 

Under the deal, as reported today by The Wall Street Journal, Coca-Cola would acquire CCE's North American business, with the bottler's European operations remaining independent, and in turn let CCE acquire Coca-Cola's bottling operations in Scandinavia and Germany.

The Wall Street Journal, citing one person familiar with the matter said that while it could learn the exact terms of the deal last night, it surmised that the deal's value could be approximately $12 billion to $13 billion, including equity and assumed debt.

Coca-Cola had first pioneered the strategy of of keeping its bottling operations separate from its main soft drink business and hived off CCE in 1986. CCE went public in the same year, with Coca-Cola taking a 34 per cent stake, becoming the largest shareholder of CCE.

The boards of the two companies were expected to meet late last night to approve the deal.

Coca-Cola Enterprises, also based in Atlanta, had a market value of $9.4 billion as of yesterday's closing trade and Coco-Cola is sitting comfortably with $8.8 billion in cash as of the third quarter.

CCE, which is Coca-Cola's largest bottler, sold approximately 41 billion units last year, which is nearly 16 per cent of Coca-Cola's global product volume and reported a profit of $730 million last year.