World’s largest soda make, Coca Cola Co. is planning to buy the North American operations of bottler Coca-Cola Enterprises Inc. This deal is expected to cost Coca Cola $15 billion including debt. Coca-Cola Inc. is in touch with the bottler unit. Both sides may start the talks soon to take decision on the deal. But there has been no such official announcement from the Coca-Cola officials as the negotiations are going confidential. There has been also in news that Coca-Cola Co. may sale its bottling operations in Scandinavia and Germany to Coca-Cola Enterprises.
Earlier PepsiCo Inc. has gone under the similar move by bringing in-house bottling operations. Both Coca-Cola and PepsiCo are trying to reposition themselves in the U.S. market. Because US market are undergoing severe declined in the soft-drink volume sales since 2005.
According to Mr. Sachin Shah who is a special situations and merger arbitrage strategist at Capstone Global Markets LLC in New York have anticipated that there won’t be a significant revenue growth straight away for Coca-Cola Enterprises after this move. But he is optimistic that buying the bottler will extracts synergies and cost savings opportunities for the company.