8-KMaterial AgreementsExhibits & Filings

COCA COLA CO 8-K Report, Material Agreement (Jun 7, 2010)

Filed June 7, 2010For Securities:KO

Summary

This 8-K filing from The Coca-Cola Company (KO) on June 7, 2010, details a material definitive agreement with Dr Pepper/Seven Up, Inc. (DPS) that is contingent upon the completion of Coca-Cola's previously announced acquisition of Coca-Cola Enterprises Inc.'s (CCE) North American business. The agreement involves a significant one-time payment of $715 million to DPS, subject to the CCE transaction closing. Key aspects of the DPS agreement include licensing of certain brands, such as Dr Pepper and Canada Dry, to Coca-Cola affiliates for specific U.S. territories. Coca-Cola will also handle the distribution of Canada Dry, C’ Plus, and Schweppes in Canada and will offer Dr Pepper and Diet Dr Pepper through its Coca-Cola Freestyle™ fountain dispensers under a 20-year agreement. This strategic move aims to expand Coca-Cola's beverage portfolio and distribution reach, particularly in fountain channels.

Key Highlights

  • 1Coca-Cola Company entered into a material definitive agreement with Dr Pepper/Seven Up, Inc. (DPS).
  • 2The agreement is contingent on the successful completion of Coca-Cola's acquisition of CCE's North American business.
  • 3Coca-Cola will make a one-time payment of $715 million to DPS upon closing of the CCE transaction.
  • 4DPS will license certain brands, including Dr Pepper and Canada Dry, to Coca-Cola affiliates for specified U.S. territories.
  • 5Coca-Cola will distribute Canada Dry, C’ Plus, and Schweppes brands in Canada.
  • 6Dr Pepper and Diet Dr Pepper will be offered through Coca-Cola's Freestyle™ fountain dispensers under a 20-year agreement.
  • 7DPS's investment in the Freestyle program is estimated between $115 million and $135 million.

Frequently Asked Questions

The agreement is primarily to license certain brands, like Dr Pepper and Canada Dry, to Coca-Cola affiliates and to integrate these brands into Coca-Cola's distribution and fountain service networks, especially in the U.S. and Canada. This is contingent on Coca-Cola's acquisition of CCE's North American business.

Coca-Cola will pay DPS a one-time payment of $715 million upon the closing of the CCE transaction. Additionally, DPS is estimated to invest between $115 million and $135 million related to the Coca-Cola Freestyle™ program.

The agreement will allow Coca-Cola to offer Dr Pepper and Diet Dr Pepper brands through its extensive fountain network, including the Coca-Cola Freestyle™ dispensers. It also grants rights for distributing Canada Dry and other associated brands in specific territories and Canada, thereby expanding its product portfolio available to consumers.

Yes, the transactions contemplated by the DPS Agreement are subject to Coca-Cola obtaining all necessary regulatory approvals and the successful closing of the previously announced acquisition of the North American business of Coca-Cola Enterprises Inc. (CCE).