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Did You Miss The 3-Way Coca-Cola Bottling Merger?

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Did You Miss The 3-Way Coca-Cola Bottling Merger?

Coca-Cola Enterprises Inc (NYSE: CCE) shares are down 24.2 percent following the completion of a merger between three The Coca-Cola Co (NYSE: KO) bottlers.

The newly-formed Coca-Cola European Partners is a combination of Coca-Cola Enterprises, Coca-Cola Iberian Partners and Coca Cola Erfrischungsgetranke GmbH.

The new company will be based in London and will be the largest independent Coca-Cola bottler. Coca-Cola Enterprises shareholders received a one-time payment of $14.50 per share, which accounts for the majority of the stock’s $12.57 per share Tuesday drop.

At its new price and configuration, Goldman Sachs analyst Judy Hong sees the stock as a Buy.

“Our Buy thesis is predicated on (1) sizable margin improvement from highly visible cost synergies; (2) double-digit EPS growth outlook over the next three years driven by margin gains and de-leveraging; and (3) potential for a positive multiple re-rating (currently at 15x NTM P/E) as EPS growth accelerates and FCF steps up,” she wrote.

Related Link: Following 3-Way Merger, Goldman Initiates Coca-Cola European Partners At Buy

Earlier this month, The Coca-Cola Co gained approval for an under-the-radar three-way merger that to create Coca-Cola Beverages Africa. The new company will be 57 percent owned by SABMiller, 31.7 percent owned by Gutsche Family Investments (GFI) and 11.3 percent owned by Coca-Cola.

Goldman has a $46 price target on Coca-Cola European Partners.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for KO

DateFirmActionFromTo
Jan 2021BernsteinInitiates Coverage OnOutperform
Jan 2021Morgan StanleyMaintainsOverweight
Jan 2021JP MorganDowngradesOverweightNeutral

View More Analyst Ratings for KO
View the Latest Analyst Ratings

 

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