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Brussels, 8 February 2000

Commission clears Merger between Hellenic Bottling Company and Coca-Cola Beverages plc, subject to undertakings

The European Commission has authorized the proposed merger of the bottling operations of Hellenic Bottling Company SA (Hellenic) and Coca-Cola Beverages plc (CCB), subject to the parties' offering certain commitments. Both CCB and Hellenic are soft drinks bottlers who primarily produce and distribute The Coca-Cola Company's beverages in various European countries. In addition, Hellenic holds a 20% stake in Frigoglass SA, a producer of food and beverage (F&B) coolers, which are used primarily to display cooled beverages. In order to resolve competition concerns raised by the proposed transaction, the parties have given the Commission an irrevocable commitment that Hellenic will sell its entire shareholding interest in Frigoglass.

The main focus of the proposed merger is at the bottling level, as the transaction essentially consists of the consolidation of the bottling operations of Hellenic and CCB. Hellenic bottles carbonated soft drinks (CSDs) and other non-alcoholic beverages (NABs) in Greece, the Republic of Ireland, Northern Ireland and certain Eastern European countries. CCB is a UK-based company that bottles CSDs and NABs in Austria, Italy and a number of Eastern European countries. The parties' operations are thus geographically complementary and the Commission investigation concluded that the operation did not raise significant competition concerns with respect to the bottling of CSDs.

Following the operation, the two companies' respective parent companies, the Kar-Tess Group (Greece) and The Coca-Cola Company (US) will be the two largest shareholders in the enlarged Hellenic bottling operations. The Kar-Tess Group is a private holding company and The Coca-Cola Company (TCCC) is the world-wide leading owner of branded CSDs, as well as owning several major NAB brands. The new enlarged Hellenic will be designated one of TCCC's anchor bottlers.

The other business involved in this operation is the production and sale of food and beverage (F&B) coolers. These coolers are typically used to display cooled soft drinks in supermarkets and other retail outlets. The Kar-Tess Group, through its subsidiary Frigoglass SA, produces and sells F&B coolers under the Frigoglass and Norcool brands. Currently, the Kar-Tess Group holds a controlling interest in Frigoglass, while Hellenic owns a 20% stake. The Commission examined whether TCCC's acquisition of an equity interest in Hellenic would raise foreclosure concerns, in light of the fact that bottlers and retail customers of TCCC beverages collectively account for a very substantial share of F&B cooler purchases in the EEA.

During the investigation, the Commission examined whether competitors of Frigoglass and Norcool might be foreclosed from selling F&B coolers to bottlers who distribute TCCC products and concluded that TCCC's link would create serious competition concerns with respect to the market for the supply of F&B coolers in the EEA. In order to remove these concerns, the parties have committed that Hellenic will sell its entire shareholding interest in Frigoglass SA. The Commission concluded that the commitment addresses the competition concerns raised by eliminating the direct links between TCCC and the F&B cooler operations of Frigoglass. Consequently, the Commission has determined to authorize the operation, subject to the parties' fulfilment of the commitments within the stipulated deadlines and to declare it compatible with the common market.

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