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Acquisitions and Divestitures
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3 Months Ended |
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Mar. 28, 2014
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ACQUISITIONS AND DIVESTITURES
Acquisitions
During the three months ended March 28, 2014, and March 29, 2013, our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled $85 million and $28 million, respectively, none of which were individually significant.
Green Mountain Coffee Roasters, Inc.
On February 5, 2014, the Company and Green Mountain Coffee Roasters, Inc. ("GMCR"), now known as Keurig Green Mountain, Inc., entered into a 10-year global strategic agreement to collaborate on the development and introduction of the Company's global brand portfolio for use in GMCR's forthcoming Keurig ColdTM at-home beverage system. Under the agreement, the companies will cooperate to bring the Keurig ColdTM beverage system to consumers around the world and GMCR will be the Company's exclusive partner for the production and sale of our branded single-serve, pod-based cold beverages. Together we will also explore other future opportunities to collaborate on the Keurig® platform. In an effort to align long-term interests, we also entered into an agreement to purchase a 10 percent equity position in GMCR. On February 27, 2014, the Company purchased 16,684,139 newly issued shares in GMCR for approximately $1,265 million, including transaction costs of $14 million. The newly issued shares were priced at $74.98, which represented the trailing 50-trading-day volume weighted-average price on the agreement date of February 5, 2014. We account for this investment as an available-for-sale security and it was included in the line item other investments on our condensed consolidated balance sheet. The purchase of this investment was included in the line item purchases of investments in our condensed consolidated statement of cash flows.
Coca-Cola Erfrischungsgetränke 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 Erfrischungsgetränke AG ("CCEAG") back to the Company in January 2014. The Company paid $503 million to purchase these shares, which was included in the line item other financing activities in the condensed consolidated statement of cash flows, and now owns 100 percent of CCEAG.
Divestitures
During the three months ended March 28, 2014, there were no proceeds from disposals of businesses, equity method investments and nonmarketable securities. During the three months ended March 29, 2013, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $690 million, which primarily included the sale of a majority ownership interest in our previously consolidated bottling operations in the Philippines ("Philippine bottling operations") to Coca-Cola FEMSA, S.A.B. de C.V. ("Coca-Cola FEMSA"), an equity method investee. The Company now accounts for our ownership interest in the Philippine bottling operations under the equity method of accounting. Following this transaction, we remeasured our investment in the Philippine bottling operations to fair value taking into consideration the sale price of the majority ownership interest. Coca-Cola FEMSA has an option to purchase our remaining ownership interest in the Philippine bottling operations at any time during the seven years following closing based on the initial purchase price plus a defined return. Coca-Cola FEMSA also has an option exercisable during the sixth year after closing to sell its ownership interest back to the Company at a price not to exceed the initial purchase price.
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