The European Commission confirmed that it had cleared the planned merger between Hellenic Bottling Company SA and Coca Cola Beverages Plc, after the Greek company agreed to sell its 20-percent stake i…
The European Commission confirmed that it had cleared the planned merger between Hellenic Bottling Company SA and Coca Cola Beverages Plc, after the Greek company agreed to sell its 20-percent stake in Frigoglass SA. “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,” it said in a statement. Frigoglass produces food and drink coolers, which are used mainly to display chilled drinks in supermarkets. The merger, announced last year, aims to consolidate the operations of the two companies, which bottle and distribute brands owned by Coca-Cola Co. of the US. British-based Coca-Cola Beverages (CCB) is partly owned by the US giant, while Hellenic is controlled by Kar-Tess Group. The merger to create the world“s second-largest Coke bottler is in effect a UK 4.3 billion takeover by Hellenic, which will own 56% of the new firm. The Commission extended its inquiry by two weeks after receiving an offer of concessions by the companies. There had been speculation that it might set conditions for the approval because of Coca Cola“s strong share of the soft drinks market. The Commission, the European Union competition watchdog, said CCB and Hellenic operated largely in complementary geographical markets so the deal did not pose competition concerns as far as bottling of carbonated soft drinks was concerned. Hellenic bottles drinks in Greece, Ireland, Northern Ireland and some eastern European countries. CCB has its bottling operations in Austria, Italy and eastern European states. But the Commission found that, because Coca-Cola Co. will have joint control of Hellenic with Kar-Tess as a result of the merger, other Coca-Cola bottlers could give preference to Frigoglass products, shutting out rival cooler manufacturers. “The Commission examined whether competitors of Frigoglass might be foreclosed from selling coolers to bottlers who distribute Coca-Cola Co. products and concluded that (Coca-Cola Co.)“s link would create serious competition concerns,” it said. The sale of Hellenic“s stake in Frigoglass would sever the link between Coca-Cola Co. and the cooler operations of Frigoglass, despite the fact that Kar-Tess controls Frigoglass, it added. Coca-Cola has run into a number of problems with regulators in Europe over recent months. Last July, the Commission seized 10,000 pages of documents during raids to investigate the company“s sales practices in Austria, Denmark and Germany.