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Coca-Cola Buys Glaceau for $4.1B
The deal to buy Glaceau, which would operate as a separate business unit within Coca-Cola's North America segment, is expected to close in the summer. It is subject to regulatory review. The boards of both companies have approved the transaction.
Glaceau is attractive for Atlanta-based Coca-Cola because of its position in the enhanced-water and energy drink categories, which Coca-Cola is betting will make up a large portion of the beverage industry's growth in North America through 2010.
  Cans of Vitaminenergy line a convenience store shelf on Friday, May 25, 2007 in New York. The Coca-Cola Co., which has been looking to expand its water and energy drink portfolio, said Friday it has agreed to buy Glaceau, maker of Vitaminenergy and Vitaminwater, in a cash deal valued at $4.1 billion. (AP Photo/Mark Lennihan) (Mark Lennihan - AP) Partnership
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• Coca-Cola said Glaceau's top three executives _ founder and CEO J. Darius Bikoff, President Mike Repole and Chief Financial Officer Mike Venuti _ intend to lead the business for at least three years, and that other key managers will remain in the business.
A spokeswoman for Glaceau, Nina Fiddian-Green, declined to discuss her company's corporate structure and financial information, and she referred questions to Coca-Cola. Glaceau does not release annual sales figures.
Bikoff told reporters Glaceau has had conversations with other companies, but he did not say whether there had been other offers besides Coca-Cola's.
"I can't tell you anything specific about offers, but I can tell you there were other companies that were talking to us, not just in recent months but for years," Bikoff said.
He would not disclose his personal ownership stake in Glaceau.
Coca-Cola has been trying to improve sales in its key North America unit, which has been a weak spot. The company's 14 percent increase in first-quarter profit came on a double-digit rise in overall sales, but in North America, unit-case volume declined 3 percent in the quarter.
Meanwhile, R.K. Krishna Kumar, vice chairman at Tata Tea Ltd., said in a conference call with reporters that his company will use part of its proceeds from the sale of its Glaceau stake to Coca-Cola to clear debt of Tetley, a British tea company that Tata Tea owns. Tetley's debt currently totals about $660 million.
Tata Tea is part of the Tata Group.
The Tata Group has been the most aggressive among Indian companies trying to acquire businesses overseas in recent years to gain global visibility after thriving for decades in a protected market at home. Earlier this year, Tata Steel bought London-based Corus Group PLC, an acquisition that propels the Indian company into the league of the world's top five steel producers.
Coca-Cola shares rose 65 cents to $51.89 Friday.
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AP Business Writer Rajesh Mahapatra contributed to this report from New Delhi.
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