Filed by Coca-Cola
Enterprises Inc. pursuant to
Rule 425 of the
Securities Act of 1933 and
deemed filed pursuant
to Rule 14a-12 of the
Securities Exchange
Act of 1934
Subject Company:
Coca-Cola Enterprises Inc.
Commission File
No.: 001-09300
John
Brock and Steve Cahillane
Live
Broadcast Script 7:20 a.m. ET to Top 250 Global CCE Leaders
February
25, 2010
[Tight
Shot John Brock]
Hello,
everyone. This morning we are making an announcement with The Coca-Cola Company
that we have reached a definitive agreement that will strategically advance and
strengthen the Coca-Cola system both in Europe and North
America. Connecting with our senior leaders about this announcement
is critical, and Steve joins me today to discuss the details and reinforce the
leadership role you will play in communicating this news to our
employees. If our technology would allow for it, Hubert would be
joining us live, as well. He is gathered with his leadership team in
Europe as we make this major announcement.
Let me
begin by saying that our work to transform our business, especially over the
past three years, has cemented the reputation of Coca-Cola Enterprises as a
world-class bottler. We are generating
consistent
financial results and driving new levels of efficiency and
effectiveness.
As we’ve
made these changes, Muhtar Kent and I have had many intense discussions about
what business model would create the most value for the Coca-Cola System in
North America and in Europe. The journey we have been on has brought
us closer than ever before, and today’s announcement is another major
development in this transformation.
In our
short time together this morning, I want to walk you through the details of what
is being announced today.
First,
The Coca-Cola Company is acquiring all of our North American operations and
integrating them with the majority of their North American
businesses. Second, CCE will expand its role as the preeminent
Western European Coca-Cola bottler. The Coca-Cola Company and Coca-Cola
Enterprises have agreed in principle that CCE will buy The Coca-Cola Company’s
bottling operations in Norway and Sweden, subject to the signing of definitive
agreements and regulatory approval. We will also have the
right to acquire the German bottler owned by The Coca-Cola Company during the
next 18 to 36 months.
Undoubtedly,
this is a monumental moment in Coca-Cola history and will change the face of the
bottling system. I’m sure you are asking yourselves “why
now?” Really, it is about two critical points: First, this
joint decision comes at a time when both The Coca-Cola Company and Coca-Cola
Enterprises are more aligned than ever before. And second, the
critical work you have done – we have done together – is driving
greater effectiveness and efficiency.
We should
be proud of the progress we have made, and clearly we are operating from a
position of strength. However, we’ve reached an inflection point in
North America. And, I believe a paradigm shift in the system is
necessary to truly drive sustainable, profitable growth.
The
primary reason I feel this shift is required is because our current businesses
in North America and Europe are significantly different. For some time now in
the U.S., we have believed that integrating the bottling system would greatly
reduce the complexities of how we go to market. Think about it, the U.S. is the
only country in the world where there are perpetual franchises with geographic
exclusivity, which impacts the system from moving in complete
alignment. It is very clear that consolidation will not happen in the
near term and that integrating our business with CCNA is the right step forward
right now. In Europe, our overall business model is much more robust
and dynamic. Let me give you some examples: there is one
European
supply
chain – led by CCE – that is responsible for fountain, food service and bottle
can. This leaves The Coca-Cola Company to do what it does
best…marketing and franchise leadership. In Europe, we are profitable
across all channels, and we have higher profit margins. So you can
clearly see that there are many opportunities ahead to strengthen the North
American Coca-Cola System, and at the same time, to expand our European
footprint to increase shareowner value.
With this
announcement, we are creating the next generation North American business model
and enhancing our ability to win long-term in Europe... while creating a
compelling value proposition for our shareowners now and beyond.
Now,
let’s turn our attention to how these new companies will be
structured. In Europe, we will retain the Coca-Cola Enterprises name,
and I will become Chairman and CEO. Several other members of the
current CCE management team will continue to lead the company, and we will give
more details as soon as possible. Also, the current CCE independent
Directors will comprise the new CCE Board. As I said, CCE will expand
its role as the preeminent Western European Coca-Cola bottler. The
Coca-Cola Company and Coca-Cola Enterprises have agreed in principle that CCE
will buy The Coca-Cola Company’s bottling operations in Norway and Sweden,
subject to the
signing of definitive
agreements.CCE will be
headquartered in Atlanta and continue to be traded on the New York Stock
Exchange as CCE. As we expand our European footprint to provide broader,
geographic coverage, we will be able to optimize our marketing and distribution
advantages and have greater financial flexibility and operational
focus. Under the continued leadership of Hubert and his team, I have
confidence that we will build on our three solid years of profitable growth in
Europe.
In North
America, The Coca-Cola Company is acquiring all of our operations and combining
the majority of their North American businesses – Foodservice, Minute Maid and
Supply Chain, including hot-fill – into a new business called Coca-Cola
Refreshments, or CCR. This will be a new business with distinct
capabilities, including supply chain, logistics, and sales and customer service
operations.
Importantly,
it is the legacy of Coca-Cola Enterprises that is making this transformation
possible. For more than 20 years, we have shown how the world’s
largest Coca-Cola bottler could execute locally -- with precision. As
we have grown, we knew that the traditional operating model that had served the
system so well had to change to keep pace with a marketplace where retailers
were consolidating and consumer needs were changing. So what did we
do? We accelerated change. We aligned against our Global Operating
Framework, streamlined our
North
American structure and launched a series of initiatives to drive effectiveness
and efficiency.
This
paved the way for today’s announcement, particularly in North
America. Steve and his leadership team have accelerated the scope and
pace of change needed to position us for the future, and we have made tremendous
progress in North America. Steve is here today as we talk about what
truly is a step change for our business. Steve…
[Tight
Shot of Steve]
Thanks,
John. Let me begin by saying I believe this announcement is the
beginning of a new era of growth and profitability for North
America. And I know that it is our work and our vision that made
today’s announcement possible.
In the
past two years, we restructured our North American Business Unit to create a
more simplified, streamlined organization. We implemented a price
increase in the U.S. to protect our margins more aggressively than we had in
years. We launched Coca-Cola Supply to help create a world-class
Supply Chain. We took a new approach to our price/package architecture to
revitalize the sparkling category. And, we launched initiatives like Right
Execution Daily and Ownership Cost Management. Together, this has
generated tremendous results. We are creating real value in the form of
profitable growth and
demonstrating
a powerful new alignment with The Coca-Cola Company.
Simply
put, this is the right decision at the right time….and we will do it in the
right way. Our system will be faster, more decisive and more
responsive to marketplace needs than ever before. This will drive
important synergies, and, in doing so, we will unlock a new era of growth and
profitability for the North American Coca-Cola system.
Coca-Cola
Refreshments will improve our speed and flexibility to market, create a low-cost
and efficient manufacturing, supply chain and logistics operation and drive
greater value for our customers and consumers.
As we go
through this transition, it is absolutely imperative that we remain focused on
the business, deliver our 2010 plan and maintain the highest levels of customer
service. I need your commitment that you will not let the progress we
have worked so hard to create falter.
Today’s
announcement is our recognition that we are the best bottler in the world, and I
truly believe our best days are yet to come.
[Tight
Shot of Brock]
Thank
you, Steve. Let me say that every member of the Executive Leadership
Team will play a key leadership role either in New CCE or Coca-Cola
Refreshments.
We
understand that our employees will have many questions. First and
foremost, as leaders and as a company, we will be transparent about this
process, maintain an open dialogue with you and all our employees and work to
answer every question. As the transition progresses over the next
several months, we will have a better idea of the integration process and
potential impact on jobs. You have our commitment that we will treat
all employees with fairness and respect throughout this process, and we will
follow established HR protocols every step of the way.
It’s
important to emphasize, however, that this deal is subject to regulatory and
shareowner approval, so it will take some time to complete. During
this time, we must stay focused on delivering the business. Whether
you are in Europe or in North America, we must all remember that our number one
priority is maintaining our positive forward momentum through a single-minded
focus on serving our customers with excellence. As a leader, we are
relying on you to do this.
I realize
this is a lot of information about our future, and we would like to pause and
answer some of your questions now.
Questions
|
1)
|
What
parts of this are in effect immediately and what is subject to approval?
What happens if the deal doesn’t get approved?
[JFB]
|
|
2)
|
Who
is going to run North America? Are bottling and branding now combined?
[SC]
|
|
3)
|
Are
we doing this in response to what Pepsi did?
[JFB]
|
|
4)
|
Why
will the new CCE be headquartered in Atlanta if it is a Western European
bottler? [JFB]
|
|
5)
|
What
does this mean to our employees, customers, consumers, and shareowners?
What happens if the deal goes
through? [JFB]
|
Thanks,
everyone – I am sure there are many more questions. In the coming
days, we will hold informational sessions, including functional meetings, to
help provide as much detail as we can. First, we will conduct a joint
KO/CCE analyst call today at 9:30 a.m. Eastern Time, which as leaders, I
encourage you to listen to. Second, the ELT will host a Virtual Town
Hall today at 1:30 p.m. to create an open dialogue with employees and answer
questions about the announcement. Details on these events will be
sent shortly. All of this information will be on our company Intranet
as soon as possible, and we encourage you to send employees there as an on-going
resource. Since the Town Hall will be so late in the day for our colleagues in
Europe, I will
host a
conference call with our European leadership tomorrow morning at 7:00 a.m.
ET.
In
closing, this is a significant day for the Coca-Cola system. Let me
be very clear: it is our performance – our legacy – that has paved the way for
this announcement. We have grown market
by market, and leveraged our size and scale while executing
locally. We have made
portfolio expansion happen and shown that we can successfully put more on our
trucks. We have become the
CRS leader in the Coca-Cola system and in the beverage industry. Most
importantly, we
have made our mark on the Coca-Cola system legacy.
We are
entering an exciting new chapter in the history of the world’s greatest
brands. Much will unfold in the coming months, and we will
communicate with you frequently and candidly throughout the
process. In the meantime, running the business is our priority – stay
focused, execute and keep the momentum of 2009 alive.
We look
forward to speaking to you again this afternoon during our Virtual Town Hall
meeting. Thanks for your leadership during this time, which will
undoubtedly become part of Coca-Cola history.
###
IMPORTANT
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This
communication does not constitute an offer to sell or the solicitation of an
offer to buy any securities or a solicitation of any vote or
approval. In connection with the proposed transaction and required
shareowner approval, the Company will file relevant materials
with
the
Securities and Exchange Commission (the "SEC"), including a proxy
statement/prospectus contained in a registration statement on Form S-4, which
will be mailed to the shareowners of the Company after the registration
statement is declared effective. The registration statement has not yet become
effective.
SHAREOWNERS
OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC,
INCLUDING THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Shareowners
may obtain a free copy of the proxy statement/prospectus, when it becomes
available, and other documents filed by the Company at the SEC's web site at
www.sec.gov. Copies of the documents filed with the SEC by the Company will be
available free of charge on the Company's internet website at www.cokecce.com
under the tab "Investor Relations" or by contacting the Investor Relations
Department of Coca-Cola Enterprises at 770-989-3246.
PARTICIPANTS
IN THE SOLICITATION
The
Company and its directors, executive officers and certain other members of its
management and employees may be deemed to be participants in the solicitation of
proxies from its shareowners in connection with the proposed transaction.
Information regarding the interests of such directors and executive officers was
included in the Company's Proxy Statement for its 2009 Annual Meeting of
Shareowners filed with the SEC March 3, 2009 and a Form 8-K filed on December
18, 2009 and information concerning the participants in the solicitation will be
included in the proxy statement/prospectus relating to the proposed transaction
when it becomes available. Each of these documents is, or will be, available
free of charge at the SEC's web site at www.sec.gov and from the Company on its
web site or by contacting the Shareowner Relations Department at the telephone
numbers above.