CHARLOTTE, N.C., April 13, 2017 (GLOBE NEWSWIRE) -- Coca-Cola Bottling Co. Consolidated (COKE) today announced it has signed definitive agreements with an affiliate of The Coca-Cola Company to expand the bottler’s distribution territory to include additional territory located within parts of northern Ohio and to purchase a manufacturing facility in Twinsburg, Ohio.
The definitive agreement to expand the Company’s distribution territory (the “Distribution Expansion Agreement”) includes the proposed territory expansion described in the previously-announced Letter of Intent dated February 8, 2016 (as amended, the “February 2016 Letter of Intent”) between the Company and The Coca-Cola Company. The Distribution Expansion Agreement includes the acquisition of territory in Akron, Elyria, Toledo, Willoughby and Youngstown, Ohio currently served by Coca-Cola Refreshments USA, Inc. ("CCR"), a wholly-owned subsidiary of The Coca-Cola Company. The Company announced in February 2017 that distribution territory associated with CCR’s Wheeling and Fairmont, West Virginia sales centers would no longer be part of the distribution territory expansion transaction contemplated by the February 2016 Letter of Intent. The Company expects to close the transactions contemplated by the Distribution Expansion Agreement in April 2017.
The definitive agreement to acquire the Twinsburg, Ohio manufacturing facility from CCR (the “Manufacturing Acquisition Agreement”) represents the proposed expansion of the Company’s manufacturing facilities described in the February 2016 Letter of Intent. The Company expects to complete the acquisition of this manufacturing facility in April 2017.
The Company is continuing to work towards definitive agreements with The Coca-Cola Company for the remaining transactions proposed in previously announced Letters of Intent dated June 14, 2016, February 6, 2017 and April 11, 2017, including:
- the exchange of distribution territory in the southern parts of Alabama, Georgia and Mississippi and south-central Kentucky and a manufacturing facility in Mobile, Alabama for distribution territory in parts of Arkansas, southwestern Tennessee and northwestern Mississippi and manufacturing facilities in Memphis, Tennessee and West Memphis, Arkansas; and
- the expansion of its distribution territory in and around Cleveland, Ohio.
The Company is also continuing to work towards a definitive agreement with Coca-Cola Bottling Company United, Inc. (“United”) for the exchange of distribution territory in south-central Tennessee, northwest Alabama, and northwest Florida for distribution territory in and around Spartanburg and Bluffton, South Carolina, as proposed in the previously announced Letter of Intent dated June 14, 2016 between the Company and United.
The Distribution Expansion Agreement contemplates the purchase by the Company of distribution assets and certain working capital items from CCR relating to the territory described above and the purchase of exclusive rights to distribute certain non-Coca-Cola beverage brands in the territory. CCR will grant the Company the exclusive rights to distribute, promote, market and sell beverage brands owned by The Coca-Cola Company as well as certain other beverage brands not owned by The Coca-Cola Company that are currently being distributed in the territory under an amendment to the Company’s comprehensive beverage agreement to be entered into at closing. Under such amended agreement, the Company will make a quarterly sub-bottling payment to CCR on a continuing basis after the closing for the grant of such exclusive rights.
The Manufacturing Acquisition Agreement and other agreements to be entered into at the closing thereunder will provide the Company with the rights to manufacture and produce beverage brands owned by The Coca-Cola Company as well as certain other beverage brands not owned by The Coca-Cola Company that are currently being manufactured by CCR at the Twinsburg, Ohio facility, if any. The transaction includes the purchase by the Company of manufacturing assets and certain working capital items from CCR relating to this manufacturing facility.
Closings of the transactions covered by the definitive agreements are subject to the parties satisfying certain conditions. There can be no assurances that these conditions will be satisfied or, if not satisfied, waived. The Company will file a Current Report on Form 8-K with the Securities and Exchange Commission regarding the proposed transactions that will be available on the Commission’s website at www.sec.gov and on the Company’s website at www.cokeconsolidated.com. For more information about the transactions, including the closing conditions and the Company’s relationship with The Coca-Cola Company, investors should read the information included in the Company’s Current Report on Form 8-K that will be filed and the agreements filed as exhibits to such report.
