Coca-Cola Consolidated Pacts For Final Franchise Territory Expansion

CHARLOTTE, NC -- Coca-Cola Bottling Co. Consolidated announced it has signed a definitive agreement with an affiliate of Coca-Cola Co. (Atlanta) to expand the bottler's franchise territory to include the Paducah and Pikeville territories in Kentucky currently served by Coca-Cola Refreshments USA Inc. (CCR), a wholly owned subsidiary of Coca-Cola Co.

The agreement represents the last phase of the proposed franchise territory expansion described in an April, 2013, Letter of Intent between Coke Consolidated and the Coca-Cola. The transaction is expected to close in early May 2015, subject to the parties satisfying certain conditions.

CCBCC signed definitive agreements with an affiliate of Coca-Cola to exchange the bottler's franchise territory in Jackson, TN, for territory currently served by CCR in Lexington, KY, and to expand the bottler's franchise territory to include Louisville, KY, and Evansville, IN.

The definitive agreement and other agreements to be entered into at closing will provide CCBCC the exclusive rights to distribute beverage brands owned by Coca-Cola, as well as certain other brands currently distributed in the Paducah and Pikeville territories by CCR. The transaction includes the purchase by CCBCC of distribution assets and certain working capital items from CCR relating to these territories and the purchase of exclusive rights to distribute certain non-Coca-Cola brands in these territories.

The transaction also includes the grant by CCR to CCBCC of exclusive rights to distribute beverage brands owned by Coca-Cola in these territories under a beverage agreement to be entered into at closing. Under this agreement, the company will make a quarterly sub-bottling payment to CCR on a continuing basis after the closing for the grant of those rights. CCBCC will not acquire any production assets from CCR and will, with certain exceptions, purchase finished goods from CCR to service customers in these territories.

Coca-Cola Bottling Co. Consolidated is the nation's largest independent Coca-Cola bottler. Its most recent franchise territory expansion, for the Cookeville and Cleveland, TN, territories, was completed late last year.