Major Bottler Arca Continental to Join U.S. Coca-Cola System Through New Agreements with The Coca-Cola Company and Coca-Cola Bottling Company UNITED

25 Mayo 2016, 00:00 AM EDT

The Coca-Cola Company to Hold 20% Stake in Planned Arca Continental
Beverages Business, with Operations to Encompass New Territories in the
United States, Plus Existing Territories in Mexico, Argentina, Ecuador
and Peru

Joint Venture Between New Arca Continental Beverages Business in the
United States and Coca-Cola Bottling Company UNITED to Operate
Territories in Texas and Parts of Oklahoma, New Mexico and Arkansas

Ozarks Coca-Cola Bottling Company to Acquire Territory in Northwest
Arkansas and Portions of Kansas and Oklahoma

ATLANTA–(BUSINESS WIRE)–The Coca-Cola Company today announced that it has signed letters of
intent to refranchise bottling operations that serve a large area of the
United States.

The transactions include territories in Texas and parts of Oklahoma, New
Mexico and Arkansas, which is an area currently known as the Southwest
operating unit of Coca-Cola Refreshments (CCR).

Under letters of intent announced today, The Coca-Cola Company will
contribute the Southwest operating unit, including distribution and
production operations, in exchange for a 20% equity stake in a new,
privately held entity. This entity, AC Beverages, will also include all
of Arca Continental’s existing beverage businesses in Latin America.
Arca Continental, which is based in Monterrey, Mexico, will continue to
be publicly traded on the Mexican Stock Exchange.

Coca-Cola Bottling Company UNITED, based in Birmingham, Ala., will
become a joint-venture partner in the U.S. operations of AC Beverages.
Arca Continental will have the majority stake in this U.S. joint
venture, where both companies will work hand-in-hand with local teams in
a solid partnership to benefit the important markets in which they
participate.

UNITED will acquire from The Coca-Cola Company the majority of its
remaining territory in Oklahoma. UNITED will contribute that territory,
along with cash, to its U.S. joint venture with AC Beverages. UNITED
will continue to independently operate all of its other territories,
which are outside of its joint venture with AC Beverages.

Separately, Ozarks Coca-Cola Bottling Company of Springfield, Mo., has
signed a letter of intent to acquire territories owned by The Coca-Cola
Company in northwest Arkansas and small areas in Kansas and Oklahoma.

The letters of intent announced today mark another key milestone as The
Coca-Cola Company continues to refranchise Company-owned North American
bottling territories. This work is expected to be completed by the end
of 2017.

“These are important agreements that will bring a valued, new partner
into the U.S. Coca-Cola system,” said J. Alexander “Sandy” Douglas Jr.,
President, Coca-Cola North America. “Arca Continental is a strong
Coca-Cola bottler that has done a great job developing and sharing best
practices in its long-standing history. Arca Continental will be a
tremendous partner with UNITED in serving a major region of the United
States, and the companies will benefit from having contiguous borders
for their territories. The Coca-Cola Company is also pleased to gain an
additional equity stake in an international bottler that is vital to our
long-term success.”

Currently, Arca Continental is the second-largest Coca-Cola bottler in
Latin America and the third-largest independent bottler in the world in
terms of unit case volume.

“These initial agreements with The Coca-Cola Company and Coca-Cola
Bottling Company UNITED, recognized by its outstanding performance in
the U.S. market, strengthen Arca Continental’s commitment to create
value in the sustainable and profitable way that has distinguished us
throughout our history,” said Manuel L. Barragan Morales, Chairman of
the Board of Arca Continental. “Led by proven leadership from across our
organizations, together we will be well-positioned to further enhance
service to the customers and consumers in a region of great importance
for the Coca-Cola system, while driving profitable growth in multiple
beverage categories.”

“UNITED is very excited to join with Arca Continental – a partner for
whom we have great respect – in this new joint venture that combines our
experience, global best practices and locally-focused operating strategy
with CCR’s very capable and committed local operating teams,” said
Claude Nielsen, Chairman of Coca-Cola Bottling Company UNITED. “These
franchises in Texas, Oklahoma, New Mexico and Arkansas bring very
dynamic markets with strong potential for growth.”

The AC Beverages/UNITED joint venture will be based in the United
States. It will become a member of the National Product Supply Group
(NPSG). The NPSG, as previously announced, will administer key
activities for member bottlers, including production of cold-fill
beverages. The NPSG is governed by a board comprised of representatives
from its current members, which are Coca-Cola North America, Coca-Cola
Refreshments, Coca-Cola Bottling Co. Consolidated, Coca-Cola Bottling
Company UNITED and Swire Coca-Cola, USA.

The AC Beverages/UNITED joint venture will own 11 cold-fill production
facilities. Nine are in Texas. Those facilities are located in El Paso,
Dallas, Fort Worth, San Antonio, McAllen, Abilene and Nacogdoches, plus
two in Houston. The other two facilities are in Oklahoma City and
Okmulgee, Okla.

21^st Century Beverage Partnership Model
History

In North America, The Coca-Cola Company began working with its bottling
partners a decade ago on plans to develop a model that evolves the
system to serve the changing customer and consumer landscape, with a
focus on creating stronger system alignment. A critical step was the
Company’s acquisition of the North American territories of Coca-Cola
Enterprises in 2010.

Since that deal closed, The Coca-Cola Company has accelerated the
implementation of the new model by strategically addressing the bottling
system, customer service, product supply and a common information
technology platform.

Ultimately, the Coca-Cola system in North America will be comprised of
economically aligned bottling partners that have the capability to serve
major customers, coupled with the ability to maintain strong, local ties
across diverse markets in the United States and Canada.

So far, the Company has reached definitive agreements or signed letters
of intent to refranchise territories that account for approximately 60%
of bottler-delivered distribution volume and 41 of the 51 cold-fill
production facilities in the United States. The Company expects to
complete its North American refranchising initiative by the end of 2017.

The new transactions announced today are subject to The Coca-Cola
Company and the companies involved reaching definitive agreements. The
proposed transactions between The Coca-Cola Company and Arca
Continental, as well as the joint venture between Arca Continental and
Coca-Cola Bottling Company UNITED, are subject to approval of AC’s
shareholders, the obtaining of regulatory approvals and other customary
conditions. The parties are committed to working together to implement a
smooth transition with minimal disruption for customers, consumers and
system associates. Financial terms are not being disclosed. The
transactions are expected to close in the first half of 2017.

About The Coca-Cola Company

The Coca-Cola Company (NYSE: KO) is the world’s largest beverage
company, refreshing consumers with more than 500 sparkling and still
brands and more than 3,800 beverage choices. Led by Coca-Cola, one of
the world’s most valuable and recognizable brands, our company’s
portfolio features 20 billion-dollar brands, 18 of which are available
in reduced-, low- or no-calorie options. Our billion-dollar brands
include Diet Coke, Coca-Cola Zero, Fanta, Sprite, Dasani, vitaminwater,
Powerade, Minute Maid, Simply, Del Valle, Georgia and Gold Peak. Through
the world’s largest beverage distribution system, we are the No. 1
provider of both sparkling and still beverages. More than 1.9 billion
servings of our beverages are enjoyed by consumers in more than 200
countries each day. With an enduring commitment to building sustainable
communities, our company is focused on initiatives that reduce our
environmental footprint, create a safe, inclusive work environment for
our associates, and enhance the economic development of the communities
where we operate. Together with our bottling partners, we rank among the
world’s top 10 private employers with more than 700,000 system
associates. For more information, visit Coca-Cola Journey at www.coca-colacompany.com,
follow us on Twitter at twitter.com/CocaColaCo,
visit our blog, Coca-Cola Unbottled, at www.coca-colablog.com
or find us on LinkedIn at www.linkedin.com/company/the-coca-cola-company.