Coca-Cola Bottling Co. Consolidated Signs Letter of Intent to Expand Distribution Territory to Cleveland, Ohio
February 07 2017 - 6:45AM
Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) (the "Company")
today announced that it has signed a non-binding letter of intent
with The Coca-Cola Company (the “February 2017 Letter of Intent”)
to expand the Company's distribution territory in northern
Ohio. The transaction proposed in the February 2017 Letter of
Intent would provide exclusive distribution rights for the Company
in territories located in and around Cleveland, Ohio currently
served by another Coca-Cola bottler. Coca-Cola Refreshments
USA, Inc. (“CCR”), a wholly-owned subsidiary of The Coca-Cola
Company, is to acquire the distribution business in these
territories from that bottler immediately prior to selling it to
the Company.
Since May 2014, the Company has expanded its
distribution territory in parts of Delaware, Kentucky, Illinois,
Indiana, Maryland, North Carolina, Ohio, Pennsylvania, Tennessee,
Virginia, West Virginia and the District of Columbia and purchased
manufacturing facilities in Maryland, Ohio and Virginia.
Under the February 2017 Letter of Intent, the
Company and The Coca-Cola Company also have agreed that
distribution territory in northern West Virginia associated with
CCR’s Wheeling and Fairmont, West Virginia sales centers will no
longer be part of the distribution territory expansion transaction
contemplated by the previously announced non-binding letter of
intent between the Company and The Coca-Cola Company dated February
8, 2016 (the “February 2016 Letter of Intent”) and will be
transferred by The Coca-Cola Company to another Coca-Cola
bottler. The Company is continuing to work towards definitive
agreements with The Coca-Cola Company for the remaining
transactions described in the February 2016 Letter of Intent,
including (i) the expansion of distribution territories in
parts of northern Ohio and (ii) the purchase of a
manufacturing facility in Twinsburg, Ohio.
The Company is also continuing to work towards
completion of the transactions contemplated by other previously
announced definitive agreements and non-binding letters of intent
with The Coca-Cola Company and CCR, including:
- closing the remaining transactions contemplated by definitive
agreements executed with CCR in September 2016 to acquire
distribution territory in parts of Indiana, Illinois and Ohio and
to acquire two manufacturing facilities in Indiana; and
- reaching a definitive agreement with CCR for the transactions
described in the letter of intent dated June 14, 2016 for the
exchange of distribution territory in the southern parts of
Alabama, Georgia and Mississippi and a manufacturing facility in
Mobile, Alabama for distribution territory in parts of Arkansas,
southwestern Tennessee and northwestern Mississippi and
manufacturing facilities in Memphis, Tennessee and West Memphis,
Arkansas.
The Company is also continuing to work towards a
definitive agreement with Coca-Cola Bottling Company United, Inc.
(“United”) for the exchange of distribution territory in
south-central Tennessee, northwest Alabama, and northwest Florida
for distribution territory in and around Spartanburg and Bluffton,
South Carolina, as proposed in the previously announced letter of
intent dated June 14, 2016 between the Company and United.
The transaction proposed in the February 2017
Letter of Intent is subject to the parties reaching a definitive
agreement, with a transaction closing expected to occur by the end
of 2017. There is no assurance, however, that a definitive
agreement will be reached or that the closing of the transaction
contemplated by the February 2017 Letter of Intent will
occur. The Company will file a Current Report on Form 8-K
with the Securities and Exchange Commission with additional
information regarding the proposed territory expansion transaction
and certain other matters addressed in the February 2017 Letter of
Intent that will be available on the Commission’s website at
http://www.sec.gov and on the Company’s website at
http://www.cokeconsolidated.com. For more information about
the transaction, including the Company’s relationship with The
Coca-Cola Company, investors should read the information included
in the Company’s Current Report on Form 8-K that will be filed and
all exhibits thereto.
About Coca-Cola Bottling Co. Consolidated:Coke
Consolidated is the largest independent Coca-Cola bottler in the
United States. Our Purpose is to honor God, serve others, pursue
excellence and grow profitably. For over 110 years, we have been
deeply committed to the consumers, customers and communities we
serve and passionate about the broad portfolio of beverages and
services we offer. We make, sell and distribute beverages of
The Coca-Cola Company and other partner companies in more than 300
brands and flavors across 16 states to over 43 million
consumers.
Headquartered in Charlotte, N.C., Coke
Consolidated is traded on the NASDAQ under the symbol COKE. More
information about the Company is available at
www.cokeconsolidated.com. Follow Coke Consolidated on Facebook,
Twitter, Instagram and LinkedIn.
Cautionary Information Regarding Forward-Looking
StatementsCertain statements contained in this news
release are “forward-looking statements” that involve risks and
uncertainties. The words “believe,” “expect,” “project,” “will,”
“should,” “could” and similar expressions are intended to identify
those forward-looking statements. These statements include, among
others, statements regarding the time frame for completing the
proposed territory expansions and manufacturing facility
acquisitions. Factors that might cause Coke Consolidated’s
actual results to differ materially from those anticipated in
forward-looking statements include, but are not limited to: lower
than expected selling pricing resulting from increased marketplace
competition; changes in how significant customers market or promote
our products; changes in our top customer relationships; changes in
public and consumer preferences related to nonalcoholic beverages;
unfavorable changes in the general economy; miscalculation of our
need for infrastructure or capital investment; our inability to
meet requirements under beverage agreements; material changes in
the performance requirements for marketing funding support or our
inability to meet such requirements; decreases from historic levels
of marketing funding support; changes in The Coca-Cola Company’s
and other beverage companies’ levels of advertising, marketing and
spending on brand innovation; the inability of our aluminum can or
plastic bottle suppliers to meet our purchase requirements; our
inability to offset higher raw material costs with higher selling
prices, increased bottle/can sales volume or reduced expenses;
consolidation of raw material suppliers; incremental risks
resulting from increased purchases of finished goods; sustained
increases in fuel costs or our inability to secure adequate
supplies of fuel; sustained increases in workers’ compensation,
employment practices and vehicle accident claims costs; sustained
increases in the cost of employee benefits; product liability
claims or product recalls; technology failures; changes in interest
rates; the impact of debt levels on operating flexibility and
access to capital and credit markets; adverse changes in our credit
rating (whether as a result of our operations or prospects or as a
result of those of The Coca-Cola Company or other bottlers in the
Coca-Cola system); changes in legal contingencies; legislative
changes affecting our distribution and packaging; adoption of
significant product labeling or warning requirements; additional
taxes resulting from tax audits; natural disasters and unfavorable
weather; global climate change or legal or regulatory responses to
such change; issues surrounding labor relations; bottler system
disputes; our use of estimates and assumptions; changes in
accounting standards; impact of obesity and health concerns on
product demand; public policy challenges regarding the sale of soft
drinks in schools; the impact of volatility in the financial
markets on access to the credit markets; the impact of acquisitions
or dispositions of bottlers by their franchisors; changes in the
inputs used to calculate our acquisition related contingent
consideration liability; and the concentration of our capital stock
ownership. These and other factors are discussed in the Company’s
regulatory filings with the Securities and Exchange Commission,
including those in our Annual Report on Form 10-K for the year
ended January 3, 2016 under Part I, Item 1A “Risk Factors,” as well
as those additional factors we may describe from time to time in
other filings with the Securities and Exchange Commission.
The forward-looking statements contained in this news release speak
only as of this date, and the Company does not assume any
obligation to update them except as required by law.
—Enjoy Coca-Cola—
Media Contact:
Kimberly Kuo
Senior Vice President, Public Affairs, Communications and Communities
704-557-4584
Investor Contact:
Clifford M. Deal, III
Senior Vice President & CFO
704-557-4633
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