Coca-Cola Enterprises Will Buy Bottler

Coca-Cola Enterprises Inc. said it will buy closely held Coke Southwest for $1.1 billion in stock and assumed debt, adding the fifth-largest U.S. bottler to its system for packaging and distributing Coca-Cola Co. drinks. With the purchase, Coke Enterprises will gain operations in Texas, Oklahoma, New Mexico, Colorado and Kansas. Coke Enterprises already bottles 65% of the Coke in the U.S. Coca-Cola, which owns 44% of Coke Enterprises, spun off the bottler in 1986 as part of a strategy by now-Chief Executive M. Douglas Ivester to get the low-margin business off its books. Now Ivester is moving to consolidate bottling among a few big companies to better direct Coca-Cola’s expansion. Share of the Atlanta-based bottler rose $1.50 to close at $37.75 on the NYSE. Dallas-based Coke Southwest is principally owned by the Hoffman family of Dallas and Prudential Insurance Co. It had 1997 sales of $431 million and sold 86 million cases of soda.