CHARLOTTE, N.C. — Coca-Cola Bottling Co. Consolidated, the nation’s largest independent Coca-Cola bottler, closed a transaction this past week to expand its distribution territory to include Norfolk, Fredericksburg and Staunton in Virginia and Elizabeth City in North Carolina. The company also announced it has signed a definitive agreement with an affiliate of the Coca-Cola Co. to purchase manufacturing facilities in Sandston, Virginia and Baltimore and Silver Spring, Md., and an agreement with other bottlers to form a National Product Supply Group (NPSG).
The closing of the distribution transaction represents the initial closing under a definitive agreement the company signed with Coca-Cola Refreshments USA Inc. (CCR), a wholly owned subsidiary of the Coca-Cola Co., in September 2015 to expand the company’s distribution territory to include territories located within Delaware, the District of Columbia, Maryland, North Carolina, Pennsylvania, Virginia and West Virginia.
The company expects to complete a series of additional transaction closings to acquire the balance of these distribution territories in 2016. The company is continuing to work toward signing definitive agreements with the Coca-Cola Co. for the acquisition of the remainder of the distribution territories described in a previously announced letter of intent from May 2015, including territories located within Ohio, Indiana, Illinois and Kentucky.
The signing of the definitive agreement to acquire three manufacturing facilities represents the first phase of the proposed expansion of the company’s manufacturing facilities described in the previously announced letter of intent dated Sept. 23, 2015, between the company and the Coca-Cola Co.
CCR currently owns these manufacturing facilities. Coca-Cola Bottling Co. Consolidated expects to begin a series of transaction closings for these manufacturing facilities in early 2016 and to complete them in 2016.
The company is continuing to work toward a definitive agreement with the Coca-Cola Co. to acquire the remainder of the manufacturing facilities described in the September 2015 letter of intent, including manufacturing facilities in Indianapolis and Portland, Ind., and Cincinnati, Ohio.
The Manufacturing Definitive Agreement and other agreements to be entered into at closing will provide the company with the rights to manufacture and produce beverage brands owned by the Coca-Cola Co., as well as certain other beverage brands not owned by Coca-Cola Co. that are currently being manufactured by CCR at such facilities, if any. The transaction includes the purchase by the company of manufacturing assets and certain working capital items from CCR relating to these manufacturing facilities.
The purpose of the agreement to form the previously announced NPSG is to establish a national product supply system. The initial members of the NPSG are Coca-Cola North America and Coca-Cola Refreshments USA Inc. along with the Coca-Cola Bottling Co. Consolidated, Coca-Cola Bottling Co. United and Swire Coca-Cola USA. The NPSG will administer key national product supply activities, including system-strategic infrastructure planning, innovation planning and optimal product sourcing at the national level for the bottlers participating in the NPSG.
Based in Charlotte, N.C., Coca-Cola Bottling Co. Consolidated is the nation’s largest independent Coca-Cola bottler with territories in 13 states.