Coca-Cola turns to Mexico’s Arca as US bottling partner

Bloomberg

Coca-Cola Co. is bringing in a Mexican partner to handle bottling in parts of the U.S. as the beverage giant boosts its reliance on franchise operators to make and distribute its drinks.
Arca Continental SAB, Latin America’s second-biggest Coca-Cola bottler, will help oversee territories in Texas and parts of Oklahoma, New Mexico and Arkansas, the companies said in a statement on Wednesday. Another bottler, Coca-Cola Bottling Co. United, will become a partner in a U.S. venture in which AC Beverages is set to hold a majority stake.
Coca-Cola Chief Executive Officer Muhtar Kent has been selling asset-heavy U.S. bottling operations in an effort to focus on the more profitable business of selling concentrates and syrups to outside companies. The North American refranchising initiative is expected to be completed by the end of next year, the Atlanta-based company said.
“Arca Continental will be a tremendous partner with United in serving a major region of the United States,” Sandy Douglas, president of Coca-Cola North America, said in the statement. “The companies will benefit from having contiguous borders for their territories.”
Terms of the transactions weren’t disclosed. The announcement is subject to the ability of the companies involved to reach definitive agreements.
Coca-Cola will hold a 20 percent stake in AC Beverages, which will also encompass Arca Continental’s existing Latin American soft-drink operations. In the U.S., the venture between AC Beverages and United will own 11 cold-fill production facilities, including nine in Texas.
Arca Continental, based in Monterrey, Mexico, will continue to be publicly traded on the Mexican stock exchange. The company has bottling operations in Mexico, Ecuador, Peru and Argentina.