CHARLOTTE, NC -- Coca-Cola Bottling Co. Consolidated has signed a nonbinding letter of intent with Coca-Cola Co. (Atlanta) to expand its franchise territory into regions currently served by the beverage giant's Coca-Cola Refreshments USA Inc. (CCR) subsidiary. The Charlotte, NC, bottler has asked to expand its distribution rights in parts of Tennessee and Kentucky, which include Knoxville, TN, and Lexington and Louisville, KY.
The proposed transaction would involve a sub-bottling arrangement through which Coke Consolidated would make ongoing payments to CCR in exchange for the exclusive distribution rights in the territory.
CCR would also transfer its rights in the territory to distribute brands not owned by Coca-Cola Co. to Coke Consolidated. In addition to territory rights, Coke Consolidated would acquire distribution assets and certain working capital from CCR relating to the expanded territory. It would not acquire any production assets.
Coke Consolidated said it hopes to reach a definitive agreement with The Coca-Cola Co. by the end of 2013 and is targeting late 2014 to complete the transaction.