Atlanta-based Coca-Cola, the world's top soft drink company, will provide marketing, distribution and management expertise and pay an undisclosed amount in cash for a fifty one percent equity interest in the partnership.
Coca-Cola's Dasani purified bottled water, the second to top brand in the US market after PepsiCo's Aquafina, is not included in the deal. Danone's home and office delivery water business also remains outside the venture.
?By expanding our water brands to include a national offering in all sectors of the water category with purified, spring and source waters, we can better satisfy the needs of more consumers and occasions and offer our bottling partners and retailers a more compelling value proposition,? said Jeff Dunn, president of Coca-Cola North America.
The deal, which came just two months after Coca-Cola secured North American distribution rights to Danone's high end Evian mineral water, catapults Coca-Cola past its rival PepsiCo. in the fastest growing part of the beverage sector.
Coca-Cola added that it was in talks to complete a transaction involving Danone's Canadian retail bottled spring and water business.
In a 2001 purchase, the New York based PepsiCo. held a 13.8-percent share of the US market for portable bottled water, followed by 12 percent for Coca-Cola and 11.5 percent for Danone's seven US brands, according to Beverage Digest, a leading industry publication.
Swiss food group Nestle, which produces and sells the Poland Spring and Zephyrhills water brands in regional US markets, was the industry leader with a 37.4 percent share of the market last year.
?This does reshape the landscape of the water business in the US,? said John Sicher, editor of Beverage Digest. ?Coke, with its various rights in the Danone brands, would become the number two player behind Nestle in the US?
Analysts noted that the addition of the Danone brands, particularly Dannon, which is lower-priced and sold across the United States, would enable Coca-Cola to compete more directly with PepsiCo's Aquafina and the Nestle brands.
Shares of Coca-Cola gained 40 cents to close at $55.25 on Monday on the New York Stock Exchange, while Danone rose 2.1 euros to close at 140.10 euros on the Paris exchange. PepsiCo. rose 84 cents to $51.74 on the NYSE.
Author: Neftegaz.ru
