COCA-COLA, P&G FORM STAND-ALONE COMPANY

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By Hillary Chura

The Coca-Cola Co. and The Procter & Gamble Co. have announced they are forming a stand-alone enterprise to develop and market juices, juice-based beverages and snacks on a global basis. Each company will own

Coke and P&G create global juice giant
50% of the new company. A name will be selected later.

The new company combines Coca-Cola's worldwide distribution, merchandising and customer marketing prowess with P&G's research and development capabilities. It will cover brands such as Minute Maid, Sunny Delight and Pringles.

The new company will have annual sales of more than $4 billion. Don Short, a 24-year Coca-Cola veteran, has been named CEO. A management team will be named soon. It will have its own board of directors, composed of two executives from The Coca-Cola Company and two from P&G.

The companies said the new entity would be non-dilutive to both companies in the first year of operation and accretive in the second year and beyond. Additional sales revenue and cost synergies are expected to offset transition costs. In a joint statement, Doug Daft, chairman and CEO of The Coca-Cola Company, and A.G. Lafley, president and chief executive of P&G, said: "This new company will focus all of its resources on becoming the global leader in innovative snacks and nutritional beverages. It multiplies our respective strengths, creating something better than either of our companies could do alone -- it's the perfect combination."

The new company will have 15 manufacturing facilities and about 6,000 employees. It will manufacture, distribute and market brands in the $50 billion global snacks category and the $34 billion global juice and juice-drinks category.

The LLC has been approved by the boards of directors of both companies and is expected to begin operations following regulatory approvals. Until then, the two companies will continue to operate independently.

"The Minute Maid Company has been a significant contributor to The Coca-Cola Company's total non-alcoholic beverage product offerings. Our investment with P&G will enable this company to focus its energies on creating even more health and wellness product offerings faster and more efficiently than either company could do on its own. At the same time, we will benefit from the combined scale of this new company," Mr. Daft said.

Copyright February 2001, Crain Communications Inc.

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