Coca Cola 2013 Annual Report Download - page 89

NOTE 2: ACQUISITIONS AND DIVESTITURES
Acquisitions
During 2013, our Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled
$353 million, which primarily included our acquisition of the majority of the remaining outstanding shares of Fresh Trading Ltd.
(‘‘innocent’’) and a majority interest in bottling operations in Myanmar. The Company previously accounted for our investment in
innocent under the equity method of accounting. We remeasured our equity interest in innocent to fair value upon the close of
the transaction. The resulting gain on the remeasurement was not significant to our consolidated financial statements.
During 2012, our Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled
$1,486 million. These payments were primarily related to the following: our investments in the existing beverage business of Aujan
Industries Company J.S.C. (‘‘Aujan’’), one of the largest independent beverage companies in the Middle East; our investment in
Mikuni Coca-Cola Bottling Co., Ltd. (‘‘Mikuni’’), a bottling partner located in Japan; our acquisition of Sacramento Coca-Cola
Bottling Co., Inc. (‘‘Sacramento bottler’’); and our acquisition of bottling operations in Vietnam, Cambodia and Guatemala. The
Company’s investment in Mikuni was accounted for under the equity method of accounting prior to 2013, when this investment
was merged with three other bottlers as Coca-Cola East Japan Bottling Company, Ltd. (‘‘CCEJ’’). Refer to Note 17 for details on
this transaction.
The Company paid $820 million during 2012 under its definitive agreement with Aujan in exchange for an ownership interest of
50 percent in the Aujan entity that holds the rights to Aujan-owned brands in certain territories and an ownership interest of
49 percent in Aujan’s bottling and distribution operations in certain territories. The Company’s investments in Aujan are being
accounted for under the equity method of accounting.
During 2011, our Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled
$971 million. These payments were primarily related to the acquisitions of Great Plains Coca-Cola Bottling Company
(‘‘Great Plains’’) and Honest Tea, Inc. (‘‘Honest Tea’’), and an additional investment in Coca-Cola Central Japan Company
(‘‘Central Japan’’). In addition, these activities included immaterial cash payments for the finalization of working capital
adjustments related to our acquisition of the former North America business of Coca-Cola Enterprises Inc. (‘‘CCE’’).
The Company acquired Great Plains on December 30, 2011. The total purchase price for the Great Plains acquisition was
approximately $360 million, of which $321 million was paid at closing. The purchase price was primarily allocated to property,
plant and equipment, identifiable intangible assets and goodwill. The Company finalized our purchase accounting for Great Plains
during the fourth quarter of 2012.
During 2011, the Company also acquired the remaining ownership interest of Honest Tea not already owned by the Company.
Prior to the Company acquiring the remaining ownership interest of Honest Tea, we accounted for our investment under the
equity method of accounting. We remeasured our equity interest in Honest Tea to fair value upon the close of the transaction.
The resulting gain on the remeasurement was not significant to our consolidated financial statements. The Company finalized our
purchase accounting for Honest Tea during the fourth quarter of 2011.
In December 2011, the Company acquired an additional minority interest in Central Japan. As a result, the Company began to
account for our investment in Central Japan under the equity method of accounting beginning in December 2011. In 2013, this
investment was subsequently merged with three other bottlers as CCEJ. Refer to Note 17 for details on this transaction.
Coca-Cola Erfrischungsgetr¨ anke AG
In conjunction with the Company’s acquisition of 18 German bottling and distribution operations in 2007, the former owners
received put options to sell their respective shares in Coca-Cola Erfrischungsgetr¨ anke AG (‘‘CCEAG’’) back to the Company on
January 2, 2014. During 2013, the Company received notification that all of the outstanding put options would be exercised, which
will result in the Company paying $498 million to purchase the shares.
Divestitures
During 2013, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $872 million.
These proceeds primarily included the sale of a majority ownership interest in our previously consolidated bottling operations in
the Philippines (‘‘Philippine bottling operations’’), and separately, the deconsolidation of our bottling operations in Brazil
(‘‘Brazilian bottling operations’’). See below for further details on each of these transactions.
In 2011, proceeds from the disposal of bottling companies and other investments totaled $398 million, primarily related to the sale
of our investment in Coca-Cola Embonor, S.A. (‘‘Embonor’’), a bottling partner with operations primarily in Chile, for
$394 million. Prior to this transaction, the Company accounted for our investment in Embonor under the equity method of
accounting. Refer to Note 17. None of the Company’s other divestitures was individually significant.
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