Coca-Cola announces change to US refranchising deal

Coca-Cola has announced a change to a US refranchising plan that was agreed upon in May.

The agreement involving Arca Continental and Coke United. will now see the latter no longer take a minority stake in new territory to be acquired by Arca in Texas and parts of Oklahoma, New Mexico and Arkansas.

J. Alexander “Sandy” Douglas Jr president of Coca-Cola North America said: “The Coca-Cola Company has worked closely with Arca Continental and United in concluding that United’s participation in a joint venture is not in the best interests of all the parties involved.

“One of the purposes of the letter of intent stage is to allow for due diligence and a deep examination of potential transactions, transitions and operating models. United continues to be a valued partner and is on track to grow significantly through other refranchising agreements with The Coca-Cola Company.

“We are also very pleased that we continue to work with Arca Continental toward a definitive agreement for their expansion into the United States. Both partners will play a valuable role in leading our U.S. system in the future.”

Arca and Coca-Cola are continuing work to reach a definitive agreement for the territory transition, according to Coke.

Claude Nielsen chairman of Coca-Cola bottling company United said: “In May, our system announced a proposed joint venture with Arca Continental involving Coca-Cola franchise operations in much of the Southwest. During our due diligence, we concluded that it is in the best interests of our company to discontinue joint venture discussions, which will permit us to continue work on flawless transitions of previously announced acquisitions, most notably the Atlanta market unit.

“We believe Arca Continental, an exceptional and very capable company, is well positioned to very effectively operate the Southwest territories. We already have a very robust collaboration with Arca and fully expect to continue our work together as they become our neighbours in the U.S. market. We will continue to work with our valued partners at The Coca-Cola Company and in the Coca-Cola system to add new territory to our fast-growing company.

“We are very optimistic about the future of the Coca-Cola business in the United States, and we’re excited about opportunities to expand our role in the system.”