Coke Consolidated Pacts To Acquire Manufacturing Facilities Expand Franchise Territory

CHARLOTTE, NC -- The nation's largest independent Coke bottler said it has signed a nonbinding letter of intent with Coca-Cola Co. to purchase manufacturing facilities and expand its franchise distribution territory in several states.

Coca-Cola Bottling Co. Consolidated has signed a nonbinding letter of intent to purchase and operate manufacturing facilities currently owned and operated by Coca-Cola Refreshments (CCR) USA Inc., a wholly owned subsidiary of Coca-Cola Co., in Sandston, VA; Silver Spring and Baltimore, MD; Indianapolis and Portland, IN; and Cincinnati, OH. A series of transaction closings for these facilities is expected to begin in the first half of 2016.

Coke Consolidated has also signed a definitive agreement for the first phase of previously announced plans for franchise territory expansion with Coca-Cola Co. It includes Baltimore, Capital Heights, Cumberland, Easton, Hagerstown, La Plata and Salisbury in Maryland; Alexandria, Norfolk, Richmond, Yorktown, Fredericksburg and Staunton in Virginia; Elizabeth City in North Carolina; and Washington, DC.

CCR currently serves these territories. Coke Consolidated said it expects to begin transaction closings for these distribution territories in fall 2015 and to complete them by mid-2016.

The agreement provides Coke Consolidated the exclusive rights to distribute beverage brands owned by Coca-Cola Co., as well as certain other non-Coca-Cola brands, that are currently being distributed in those territories by CCR. Coke Consolidated will make a quarterly sub-bottling payment to CCR on a continuing basis for the exclusive rights.

The companies have also executed a "territory conversion agreement" which provides for all of Coke Consolidated's franchise distribution territories with Coca-Cola Co., including its legacy, recently acquired and to-be-acquired territories, to be governed in the future by a new form of comprehensive beverage agreement.

Coke Consolidated said it is continuing to work towards a definitive agreement with Coca-Cola for the remainder of the proposed franchise territory expansion, including distribution territories in parts of Ohio, Indiana, Illinois and Kentucky.

"We are excited about the opportunity to own and operate additional manufacturing facilities and become a part of a new national product supply group for the Coca-Cola system," said Coca-Cola Bottling Co. Consolidated chairman and chief executive J. Frank Harrison III.

Headquartered in Charlotte, NC, Coca-Cola Bottling Co. Consolidated has franchise territories in 13 states.