Sector News

Coca-Cola considers selling nine bottling plants

September 24, 2015
Food & Drink

(Reuters) – Coca-Cola Co said its Coca-Cola Refreshments (CCR) bottling unit was considering selling nine plants in the United States to three independent bottlers to reduce costs.

The sale of the plants, which have an estimated net book value of $380 million, is expected to take place between 2016 and 2018, Coca-Cola said on Thursday.

The plants will be bought by Coca-Cola Bottling Co Consolidated, Coca-Cola Bottling Co United and Swire Coca-Cola USA, the company said.

The divestments are being made under a plan that aims to streamline the world’s largest soda maker’s product supply chain in the United States.

As part of the plan, Coca-Cola Bottling Co will buy plants in Virginia, Maryland, Indiana and Ohio, Coca-Cola Bottling Co United will buy a plant in New Orleans and Swire will buy plants in Arizona and Colorado.

Coca-Cola Co is the largest shareholder in Coca-Cola Bottling Co with a 34.8 percent stake as of May. Swire Coca-Cola USA is a unit of Hong Kong-based Swire Pacific Ltd.

Coke has been selling bottling operations to franchisees to shift away from the capital intensive and low-margin business. .

Coca-Cola Bottling Co also said it signed an agreement with a Coca-Cola Co unit to expand its distribution territory to include areas within Delaware, the District of Columbia, Maryland, North Carolina, Pennsylvania, Virginia and West Virginia. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Savio D’Souza)

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