Mexico’s Arca Continental to Bottle, Distribute Coca-Cola in Southwest U.S.

5/26/16 Wall Street Journal 

14716049305_62495b73a5_bCoca-Cola Co. said Wednesday it plans to transfer its soda manufacturing and distribution in Texas and parts of Oklahoma to a joint venture headed by Mexico’s Arca Continental SAB.

The letter of intent with Arca, Coke’s second-largest bottler in Latin America, comes as Atlanta-based Coke accelerates efforts to divest plants and trucks in order to focus on marketing and its more profitable concentrate business.

Arca is the first Mexican bottler to acquire Coke territory in the U.S. but not the first foreign partner. Hong Kong-based Swire Pacific Ltd. is a major Coke bottler and distributor in the Western U.S. and Japan’s Kirin Holdings Co. owns a Coke bottler in the Northeast.

Coke said in February it would sell all of its U.S. manufacturing and distribution by the end of 2017, part of a broader global divestment drive. It paid $12.3 billion in 2010 to acquire the U.S. territories of Coca-Cola Enterprises Inc., its biggest domestic bottler at the time.

With the latest deal, Coke said it has struck deals to refranchise territories representing about 60% of bottler-delivered volume and 41 of 51 cold-fill production plants in the U.S.  Coke still owns bottling and distribution in California and parts of the Northeast, in addition to other territories.

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