Sector News

Coca-Cola says European bottling merger will dent quarter’s results

June 16, 2016
Consumer Packaged Goods

Coca-Cola Co. on Thursday said an earlier completion of a major European bottling merger will drag results in the current quarter.

Coke now expects the net impact of acquisitions, divestitures and other structural items to be a 5 to 6 point headwind on revenue and a 4 to 5 point headwind on income before taxes in the second quarter.

Last August, three Coca-Cola Co. bottlers agreed to a merger combining $12 billion in revenue across 13 European countries, part of a global consolidation push by the U.S. soda giant to cut costs amid slowing sales.

Publicly traded bottler Coca-Cola Enterprises Inc., which makes and distributes Coke in eight European countries including the U.K. and France, combined with Spain’s privately held Coca-Cola Iberian Partners SA and Germany’s Coca-Cola Erfrischungsgetränke AG, the latter owned by Atlanta-based Coke.

The tie-up, which was completed May 28—about one month before expectations—formed the world’s largest independent Coke bottler by revenue.

By Anne Steele

Source: Wall Street Journal

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