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Rule
425 of the Securities Act of 1933 and
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deemed
filed pursuant to Rule 14a-12 of the
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Securities
Exchange Act of 1934
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Subject
Company: Coca-Cola Enterprises Inc.
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Commission
File
No.: 001-09300
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Rationale:
The Coca-Cola Company (TCCC)
and Coca-Cola Enterprises (CCE) Advance and Strengthen Their
Partnership
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Strategic
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Operational
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Financial
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· Fully
aligns with the Coca-Cola system’s 2020 Vision – our roadmap for winning
together – to continuously improve and evolve our global franchise system
to best serve our customers and consumers everywhere
· TCCC
will work closely with its bottling partners to create an evolved
franchise structure for the unique needs of the North American
market
· In
Europe, CCE is further strengthening its franchise system to provide
broader, contiguous geographic coverage and optimize its marketing and
distribution leadership
· CCE
remains the preeminent Western European bottler and a key strategic
partner with TCCC
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· Enables
TCCC’s ability to run the most efficient manufacturing, supply chain and
logistics operation
· Evolves
TCCC’s North American business to more profitably deliver the world’s
greatest brands in the largest NARTD profit pool in the world
· TCCC
and CCE will continue to increase efficiencies across adjacent European
geographies and improve the effectiveness of CCE’s operations in its
expanded presence in Europe
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· Drives
long-term value for all shareowners
· TCCC
is converting passive capital into active capital, giving it direct
control over its investment in North America to accelerate growth and
drive long-term profitability
· CCE
shareowners will benefit from the improved financial growth profile and
expansion of the Western European business
· The
substantially cashless transaction leverages the unique scale
opportunities in the U.S., which will increase KO’s growth rate and cash
flow and unlock significant incremental operating income over the next
several years
· TCCC
will generate immediate efficiencies with operational synergies expected
to be approximately $350 million over four years, and the transaction is
expected to be accretive to EPS on a fully diluted basis by
2012
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Terms
of Agreement
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· The
Coca-Cola Company’s acquisition of the assets and liabilities of CCE’s
North American business includes consideration of the
following:
o The
Coca-Cola Company’s current 34% equity ownership in CCE, valued at $3.4
billion, based upon a thirty day trailing average as of February 24,
2010
o The
assumption of $8.88 billion of CCE debt
o The
assumption of all North American assets and liabilities – including CCE’s
accumulated benefit obligation for North America of $580 million as of
December 31, 2009, and certain other one-time costs and
benefits
· CCE’s
public shareowners will receive one share in the new CCE for each existing
share of CCE and will receive $10 per share as consideration. They will
hold 100 percent of the new entity.
· The
Coca-Cola Company and Coca-Cola Enterprises have agreed in principle that
CCE will buy The Coca-Cola Company’s bottling operations in Norway and
Sweden, subject to the signing of definitive agreements. Further, CCE will
have the right to acquire The Coca-Cola Company’s 83% stake in its German
bottling operations 18 to 36 months after close for fair
value.
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Evolved
Franchise Structure
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North
America
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Europe
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At
the close, The Coca-Cola Company will rename the sales and operational
elements of the North American businesses Coca-Cola Refreshments USA, Inc.
(“CCR-USA”) and Coca-Cola Refreshments Canada, Ltd. (“CCRC”), which will
be wholly-owned subsidiaries of The Coca-Cola Company. Following the
close, The Coca-Cola Company will combine our very successful Fountain
business, the dynamic Minute Maid juice business, and our Supply Chain
organization, including finished product operations, and our company-owned
bottling operations in Philadelphia with CCE’s North American business to
form CCR-USA and CCRC.
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At
the close, CCE will be The Coca-Cola Company's strategic bottling partner
in Western Europe and the third-largest independent bottler globally.
Reflecting CCE’s position as The Coca-Cola Company's strategic bottling
partner in Western Europe, the companies will enter into a 10+10 year
bottling agreement and a 5-year incidence pricing agreement. Pro forma,
including the contributions of Norway and Sweden, CCE would have generated
approximately $7.3 billion in revenues, $850 million in operating income,
and $1.2 billion of EBITDA in 2009.
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About
The Coca-Cola Company (NYSE: KO)
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About
Coca-Cola Enterprises (NYSE: CCE)
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The
Coca-Cola Company (NYSE: KO) is the world’s largest beverage company,
refreshing consumers with more than 500 sparkling and still brands. Along
with Coca-Cola, recognized as the world’s most valuable brand, the
Company’s portfolio includes 12 billion dollar brands, including Diet
Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid,
Simply and Georgia Coffee. Globally, we are the No. 1 provider of
sparkling beverages, juices and juice drinks and ready-to-drink teas and
coffees. Through the world’s largest beverage distribution system,
consumers in more than 200 countries enjoy the Company’s beverages at a
rate of 1.6 billion servings a day. With an enduring commitment to
building sustainable communities, our Company is focused on initiatives
that protect the environment, conserve resources and enhance the economic
development of the communities where we operate. For more information
about our Company, please visit our website at
www.thecoca-colacompany.com.
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Coca-Cola
Enterprises Inc. is the world's largest marketer, distributor, and
producer of bottle and can liquid nonalcoholic refreshment. CCE sells
approximately 80 percent of The Coca-Cola Company's bottle and can volume
in North America and is the sole licensed bottler for products of The
Coca-Cola Company in Belgium, continental France, Great Britain,
Luxembourg, Monaco, and the Netherlands. For more information about our
Company, please visit our website at
www.cokecce.com.
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