ATHENS, Greece - July 27, 2001- Coca‑Cola Hellenic Bottling Company S.A. has today signed a non-binding Letter of Intent with The Coca‑Cola Company to acquire all Coca‑Cola Company-owned bottling operations in Russia and the Baltic countries of Estonia, Latvia and Lithuania.
The transaction includes operations in Moscow, St Petersburg, Central Russia and the Russian Far East as well as the acquisition of equity held by The Coca‑Cola Company in Coca‑Cola Molino Beverages Limited. Coca‑Cola Molino Beverages Ltd. is a joint venture between Coca‑Cola HBC (60%) and The Coca‑Cola Company (40%), which holds the existing operations managed by Coca‑Cola HBC in Western Russia and Siberia.
Subject to the completion of normal due diligence, regulatory approval and final contracts, the transaction is expected to close before the end of the year.
The Coca‑Cola Company's Russian and Baltic territories will add more than 100 million unit cases* of volume and 100 million consumers to Coca‑Cola HBC's existing territory and present substantial opportunities for future profitable growth. Subject to due diligence and closing adjustments, it is expected that the total consideration for the operations being acquired will be approximately US$200 million.
Coca‑Cola HBC is the second largest bottler of Coca‑Cola Company products in the world with operations in 23 countries including parts of Russia and the adjoining countries of Ukraine, Belarus and Poland. By acquiring Coca‑Cola Company-owned bottling subsidiaries in Russia and the Baltics, Coca‑Cola HBC will benefit from greater synergy and efficiencies brought about through the consolidation of geographically contiguous operations.
Upon completion, Coca‑Cola HBC will operate in 26 countries serving more than 500 million consumers with approximately 1.2 billion unit cases of alcohol-free beverages.
The existing facilities operated by Coca‑Cola HBC in Western Russia and Siberia are showing impressive performances. This solid foundation will enable the company to release the full potential of the businesses it hopes to acquire as a result of this transaction in-line with the company's strategic growth plan.
Irian Finan, Managing Director of Coca‑Cola HBC, commented: "Following the successful integration of Hellenic Bottling and Coca‑Cola Beverages we are well placed to absorb these contiguous territories into our business. Over recent years, the territories we are proposing to acquire have benefited from significant investment and will not require material further capital investment in the immediate future. Coca‑Cola HBC will continue to tightly manage capital investment enhancing Returns on Tangible Assets. This expansion provides further scope for growth whilst also providing opportunities for operating efficiencies for the benefit of our customers and shareholders."
Coca‑Cola HBC, an anchor bottler of The Coca‑Cola Company, is listed on the Athens Stock Exchange, with secondary listings in London and Sydney.
In line with normal reporting practices, Coca‑Cola HBC will announce results for the half year to June 30th in Athens on Friday August 24th.
*Unit case is a standard reference used throughout the industry and is equivalent to 24 8-oz (237ml) servings or 5.678 litres