Coca-Cola M&A Activity, CCE Acquisition: Executive Summary

Executive Summary

The beverage industry is a wide-open field with hundreds of companies and many thousands of diverse products. Consumer preferences are shifting away from sugary sodas and toward more healthy juice and tea drinks. The major players in the beverage industry worldwide, namely Coca-Cola and PepsiCo, are adapting their business models to meet this shift. Part of this adaptation involves increased M&A activity of specific types. To be successful in the beverage industry, a company must keep costs down while ensuring that revenue continues to grow.

Two ways to keep the bottom-line healthy in these times of economic uncertainty and budding inflation are aggressively pursuing horizontal and vertical integration. This approach has spawned two business model trends amongst beverage companies. Rather than developing their own new brands, the majors are waiting to see which products small competitors are able to successfully bring to market, and then buying up those brands. This strategy is perceived to be more cost effective, and as brands are acquired, the industry experiences horizontal integration. By buying new brands in emerging markets, companies expand their revenue base substantially. Vertical integration takes place in the form of bottling partner acquisitions. PepsiCo sparked a wave of bottling and distribution partner integration in 2009 with its acquisitions of Pepsi Bottling Group and PepsiAmericas.

Historically, beverage makers kept their syrup and concentrate-making activities in-house, and franchised out the bottling and distribution operations. Coca-Cola has slowly begun to buy up bottling plants around the world in recent years, and organized them internally under the Bottling Investments Group. But the company’s 2010 deal to acquire the North American operations of Coca-Cola Enterprises, one of Coke’s largest bottling partners worldwide, is on a scale the beverage industry has never before seen. This report establishes the context for analyzing the Coca-Cola/CCE deal in depth by detailing the beverage industry and its various types of M&A activity.

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