Coca-Cola Bottling Co. Consolidated COKE (the “Company”) today
announced that it has signed a non-binding letter of intent with The Coca-Cola
Company to expand the Company's franchise territory. The letter of intent
provides additional distribution rights for the Company in parts of Tennessee
and Kentucky which include major markets, Knoxville, TN and Lexington and
Louisville, KY. Coca-Cola Refreshments USA, Inc. (“CCR”), a wholly owned
subsidiary of The Coca-Cola Company, currently serves this territory.
The proposed transaction for acquiring distribution rights to the expanded
territory will be accomplished by a sub-bottling arrangement with CCR under
which the Company would make ongoing payments to CCR in exchange for the
exclusive distribution rights in the territory. CCR would also transfer its
rights in the territory to distribute brands not owned by
The Coca-Cola Company to the Company as part of the transaction. In addition
to territory rights, the Company would also acquire distribution assets and
certain working capital from CCR relating to the expanded territory. The
Company would not acquire any production assets from CCR. The new territory
will be covered by a new form of comprehensive beverage agreement between the
parties.
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