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Bottles of Coca Cola are displayed at a market on April 16, 2013 in San Francisco, California.
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SYDNEY— Coca-Cola Co. agreed in principle to sell its stake in its Australian bottler to one of its European affiliates, its latest move to reduce exposure to costly bottling operations and focus on the more lucrative concentrate-making business.
The deal between Atlanta-based Coke KO, -0.31% and Coca-Cola European Partners CCEP, -1.14%, which bottles and distributes Coke products in Western Europe, values Coke’s 31% stake in the Australian bottler at roughly $1.6 billion. Coca-Cola European Partners on Monday also offered to buy the remaining 69% of the Australian company, Coca-Cola Amatil Ltd. CCL, +16.27%
Bottling has been losing fizz within Coke for a while.
In 2017, Coke completed a raft of deals in the U.S. that turned its bottling business there from a largely company-owned system to one run by local groups, some of them family owned, that truck product to stores and operate production plants. A year later, Coke sold its bottling operations in Canada, including distribution centers and five soda-making factories.
Jettisoning those asset-heavy operations has meant Coke’s employee numbers have fallen sharply in recent years, while helping to reduce its debt burden. Still, Coke is facing new challenges brought on by the coronavirus crisis and has discontinued some brands, laid off some workers and revamped its marketing strategy.
