Coca-Cola Acquisition of CCE North America: Regulatory and Shareholder Approval of the Transaction

Regulatory and Shareholder Approval of the Transaction

From a regulatory perspective, this M&A deal almost exactly mirrors the 2009 transaction whereby PepsiCo acquired its two largest bottling partners. In that deal, both Pepsi Bottling Group and PepsiAmericas had existing bottling and distribution agreements with the Dr. Pepper Snapple Group for certain beverage products. Coincidentally, the same agreement exists between Dr. Pepper and CCE in which the latter bottles and distributes the former’s products throughout various North American geographic segments. In an identical decision, the Federal Trade Commission has decreed that the Coke/CCE deal may only come to fruition if the former sets up an information “firewall” that would prevent certain Coca-Cola employees from gaining access to competitive information that Dr. Pepper has shared with CCE under its existing bottling agreement.[ "FTC Puts Conditions on Coca-Cola's $12.3 Billion Acquisition of Its Largest North American Bottler." Federal Trade Commission. 27 Sept. 2010. Web. 29 Apr. 2011. http://www.ftc.gov/opa/2010/09/coke.shtm .] This position by the FTC is intended to prevent the release of Dr. Pepper’s proprietary business information and therefore eliminate potential conflicts of interest inherent to the business landscape.

In one final regulatory move, the Canadian Competition Bureau approved this acquisition in the fall of 2010.[ "Coca-Cola - Press Center - Press Kits - Regulatory Clearance For CCE Acquisition." Coca-Cola: The Coca-Cola Company. 27 Sept. 2010. Web. 29 Apr. 2011. http://www.thecoca-colacompany.com/dynamic/press_center/2010/09/the-coca-cola-company-obtains-regulatory-clearance-for-acquisition-of-cces-north-american-business.html .] As CCE engages in limited bottling and distribution activities in Canada, this approval was necessary before a complete acquisition could be made by Coca-Cola. Separately, the final seal of approval on the deal comes from current CCE shareholders, whose investment position is likely to alter significantly if the acquisition goes through as planned. The new CCE they will be shareholders of will focus almost exclusively on bottling and distribution of Coca-Cola products in Europe. This focus will be enhanced by CCE’s counter-acquisition of Coke’s Swedish and Norwegian bottling operations, and the later option of purchasing Coke’s German bottling operations at fair value, a major discount from what an outside party would have to pay. Regarding approval of the entire deal, CCE shareholders were scheduled to have a vote on the morning of October 1st, 2010. According to a CCE announcement, enough shareholders approved the acquisition, and execution of the deal is to begin immediately.[ Geller, Martinne, and Brad Dorfman. "Coke Enterprises' Shareholders Approve Coke Deal." Reuters.com. 01 Oct. 2010. Web. 29 Apr. 2011. http://www.reuters.com/article/2010/10/01/us-cocacolaenterprises-idUSTRE6903E720101001 .]

More posts from a paper on Coca-Cola M&A Activity (including merger with CCE):

Coca-Cola M&A Activity, CCE Acquisition: Executive Summary
Coca-Cola M&A Activity: Introduction
Coca-Cola M&A Activity: Product Trends
Coca-Cola M&A Activity: Demand and Economic Trends
Coca-Cola M&A Activity: Business Model Trends in the Beverage Industry
Coca-Cola M&A Activity: Beverage Industry Business Model Trends (2)
Coca-Cola M&A Activity: Company Strategic Objectives
Coca-Cola M&A Activity: Company Strategic Objectives (2)
Coca-Cola M&A Activity: Company Portfolio Analysis
Coca-Cola M&A Activity: Company Portfolio Analysis (2)
Coca-Cola M&A Activity: Company Portfolio Analysis (3)
Coca-Cola M&A Activity: PepsiCo M&A Portfolio Analysis (Largest Competitor)
Coca-Cola M&A Activity: PepsiCo M&A Portfolio Analysis (Largest Competitor) (2)
Coca-Cola M&A Activity: Other Beverage Industry M&A Activity
Coca-Cola Acquisition of CCE North America: Deal Structure
Coca-Cola Acquisition of CCE North America: Deal Structure (2)
Coca-Cola Acquisition of CCE North America: Major Legal and Financial Players
Coca-Cola Acquisition of CCE North America: Regulatory and Shareholder Approval of the Transaction
Coca-Cola Acquisition of CCE North America: Implementation Analysis: Likelihood of Acquisition Success
Coca-Cola Acquisition of CCE North America: Implementation Analysis: Likelihood of Acquisition Success (2)
Coca-Cola Acquisition of CCE North America: Conclusion to M&A Deal Analysis
Coca-Cola CCE Merger: Table of Contents and Works Cited List