Coke, Groupe Danone Announce Partnership For Bottled Spring, Source Water Brands

The Coca-Cola Company and Groupe Danone have announced a partnership for the production, marketing and distribution of Groupe Danone's retail bottled spring and source water business in the United States.

Under the agreement, Groupe Danone will contribute the assets of its retail bottled spring and source water business in the United States, including five production facilities, a license for the use of the Dannon and Sparkletts brands as well as ownership of several value brands. In addition to a cash payment for a 51 percent equity interest in the partnership, The Coca-Cola Company will provide marketing, distribution and management expertise. The transaction is expected to close shortly. Additional details of the transaction were not disclosed.

Groupe Danone's Evian brand, The Coca-Cola Company's Dasani brand, and Danone's home/office delivery bottled water business are not included in the partnership. In April 2002, Groupe Danone and The Coca-Cola Company announced a master distribution agreement under which The Coca-Cola Company will manage marketing execution, sales and distribution for the Evian brand in North America (U.S. and Canada).

Emmanuel Faber, Groupe Danone's chief financial officer, said, "This partnership combines Danone's premier retail bottled spring and source water business in the U.S. with The Coca-Cola Company's strength in brand-building and beverage distribution. We are confident that our shareholders will benefit from significantly improved growth prospects for our U.S. retail bottled spring water business."

Jeff Dunn, president and chief operating officer of Coca-Cola North America, said, "This partnership enhances our water strategy in the United States by allowing us to participate fully in the fast-growing retail water category for the entire Coca-Cola system. 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."

The partnership's assets will include Danone Waters of North America's production facilities in Mount Shasta and Anaheim, California; Grand Prairie, Texas; High Springs, Florida; and Milesburg, Pennsylvania.

The companies also are discussing a transaction related to Groupe Danone's Canadian retail bottled spring and source water business, which they hope to complete in the coming months.

Groupe Danone is a worldwide food manufacturer focused on three product categories: fresh dairy products, bottled water, and cereal snacks and biscuits. Danone's portfolio of brands and products includes national and international market leaders such as Danone (Dannon in the United States) and Evian.

Source: PR Newswire