Coca-Cola Enterprises, Coca-Cola Iberian Partners And Coca-Cola EAG To Merge

(RTTNews) - Coca-Cola Enterprises Inc. (CCE) , Coca-Cola Iberian Partners SA or "CCIP" and Coca-Cola Erfrischungsgetränke AG or "CCEAG", a wholly owned subsidiary of The Coca-Cola Co. (KO), announced that they have agreed to combine their businesses into a new company to be called Coca-Cola European Partners Plc.

The Boards of Directors of Coca-Cola Enterprises, Coca-Cola Iberian Partners and The Coca-Cola Company have approved the transaction.

At closing, Coca-Cola Iberian Partners and The Coca-Cola Company will own 34% and 18% of the combined company, respectively, with CCE shareowners owning 48% on a fully diluted basis.

CCE shareowners will receive, for each CCE share held, one share of Coca-Cola European Partners and a one-time cash payment of $14.50 per share. The aggregate one-time cash payment of approximately $3.3 billion will be funded by the new company using newly issued debt.

The proposed merger is subject to approval by CCE's shareowners, receipt of regulatory clearances and other customary conditions. The merger is expected to close in the second quarter of 2016.

On a pre-synergy, pro forma basis, for 2015 the combined company's annual net revenues are expected to be approximately $12.6 billion with $2.1 billion of EBITDA and $1.6 billion of operating income with a volume of 2.5 billion unit cases.

The Coca-Cola Company expects to account for its stake under the equity method of accounting and expects the merger to be slightly accretive to 2016 comparable earning per share.

In support of growth plan, The Coca-Cola Company and Coca-Cola European Partners will enter into a new 10-year bottling agreement with an option to renew for an additional 10-year period. There will be an initial four-year incidence pricing agreement, extending economic terms currently in place in each respective territory.

Sol Daurella, who is currently Executive Chairwoman of Coca-Cola Iberian Partners, will become Chairwoman of Coca-Cola European Partners and John Brock, who is Chairman and Chief Executive Officer of Coca-Cola Enterprises, will become Chief Executive Officer. Both will be members of the Board of Directors.

Damian Gammell, currently Beverage Group President and CEO of Anadolu Efes and a previous Chief Executive Officer of CCEAG, will join CCE as Chief Operating Officer in autumn 2015 and become Chief Operating Officer of Coca-Cola European Partners upon closing. Manik Jhangiani, currently the Chief Financial Officer of CCE, will become Coca-Cola European Partners' Chief Financial Officer and Víctor Rufart, currently General Manager of CCIP, will become Chief Integration Officer. Other members of the new executive team will be announced before the closing of the transaction.

Along with Ms. Daurella and Mr. Brock, the initial Board of Directors of Coca-Cola European Partners will consist of 15 additional members, with the majority of the Board being independent, non-executive directors.

Coca-Cola European Partners will be incorporated in the United Kingdom, with its headquarters in London. The combined company will be publicly traded with listings on the Euronext Amsterdam, the New York Stock Exchange and the Madrid Stock Exchange.