EXHIBIT 99.1
FOR IMMEDIATE RELEASE
COCA-COLA AND PROCTER & GAMBLE ANNOUNCE NEW
COMPANY TO SERVE GROWING GLOBAL DEMAND FOR INNOVATIVE
JUICES, "BETTER FOR YOU" BEVERAGES AND SNACKS
ATLANTA and CINCINNATI, February 21, 2001 -- The Coca-Cola Company (NYSE:
KO) and The Procter & Gamble Company (NYSE: PG) today announced a stand-alone
enterprise focused on developing and marketing innovative juices, juice-based
beverages and snacks on a global basis.
The new company combines best-in-class capabilities -- Coca-Cola's
worldwide distribution, merchandising and customer marketing prowess and P&G's
renowned research and development capabilities and a range of great brands,
including Minute Maid{R}, Sunny Delight{R} and Pringles{R}.
The Coca-Cola Company and P&G will each own 50 percent of the new company,
which will be named later. From the start, the new company will have annual
sales of more than $4 billion. Don Short, a 24-year Coca-Cola veteran, has been
named CEO of the new company. A management team will be named soon.
The combination is expected to be non-dilutive to both companies in the
first year of operation and accretive in the second year and beyond. Additional
sales revenue and cost synergies are expected to offset transition costs.
In a joint statement, Doug Daft, chairman and CEO of The Coca-Cola Company,
and A.G. Lafley, president and chief executive of P&G, said: "This new company
will focus all of its resources on becoming the global leader in innovative
snacks and nutritional beverages. It multiplies our respective strengths,
creating something better than either of our companies could do alone -- its the
perfect combination."
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ABOUT THIS NEW COMPANY
The new business unit will be a limited liability company (LLC). It will
have its own board of directors, composed of two executives from The Coca-Cola
Company and two from P&G.
The new company will have its own focused management and resources, a
premier research and development capability in juice and wellness beverages,
unmatched global consumer knowledge, and routes to market through the world's
finest distribution system.
The Coca-Cola Company brings the following brands into this new enterprise:
Minute Maid, Hi-C{R}, Five-Alive{R}, Fruitopia{R}, Cappy{R}, Kapo{R}, Sonfil{R}
and Qoo{R}. P&G brings Pringles, Sunny Delight}R} and Punica{R} beverages.
The new company will have 15 manufacturing facilities and about 6,000
employees. It will manufacture, distribute and market brands in the $50 billion
global snacks category and the $34 billion global juice and juice-drinks
category.
The LLC has been approved by the boards of directors of both companies and
is expected to begin operations following regulatory approvals. Until then, the
two companies will continue to operate independently.
KEY SYNERGIES
The companies expect sales of the LLC to grow from just over $4 billion to
$5 billion within two years.
The new company is expected to generate synergies both revenue enhancements
and cost savings that will grow to about $200 million pre-tax earnings annually
by 2005. These include:
- Pringles revenue growth, which is expected to double through expanded
distribution ($120 million).
- Revenue synergies on the combined juice and juice beverage
businesses primarily through improved distribution and merchandising
on Sunny Delight ($30 million).
- Cost synergies through reduced manufacturing, distribution and
administrative expenses and combined purchasing operations ($50
million).
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In total, these synergies are expected to create $1.5-2 billion in
increased value for P&G and The Coca-Cola Company shareholders.
Following the formation of the LLC, the results of the companies' former
operations will no longer be consolidated in their financial statements. The
income from the LLC will be reflected in both companies' earnings, using the
equity method.
EXECUTIVE COMMENTS
Mr. Doug Daft: "The Minute Maid Company has been a significant contributor
to The Coca-Cola Company's total non-alcoholic beverage product offerings. Our
investment with P&G will enable this company to focus its energies on creating
even more health and wellness product offerings faster and more efficiently than
either company could do on its own. At the same time, we will benefit from the
combined scale of this new company."
Mr. A.G. Lafley: "This focused, stand-alone company is the best way to
unlock the growth potential of our global snacks and juice brands. The starting
point is dramatically increased distribution. Coca-Cola has access to 16 million
outlets globally. In the U.S. alone, that represents a 10-fold increase for
Pringles from 150,000 points of distribution to 1.5 million. In addition, the
stand-alone company will now have the opportunity to commercialize our beverage
and snacks innovations faster and more fully across a broader range of brands
and markets. This will be a tax-effective deal, which will enable P&G to benefit
from the long-term growth of the new enterprise.
"This independent venture is an excellent example of the strategic choices
we're making at P&G to maximize the shareholder value of our brands. Exploring
strategic options for P&G's businesses is an ongoing process."
Mr. Don Short: "This is an innovative beverage and snacks enterprise. We
will combine global brands, tremendous talent from both companies, a dynamic
mindset that will infuse our products, an entrepreneurial corporate culture, and
best-in-class innovation, marketing and distribution capabilities to meet
consumer needs. The new company enables us to achieve focus, match resources to
opportunity and achieve instant scale with a unique ability to commercialize and
deliver products."
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ON THE COCA-COLA COMPANY AND P&G
The Coca-Cola Company is the owner of Coca-Cola, the world's best-known
brand, and the Company markets more than 230 other products in 200 countries.
Through the world's largest distribution system, consumers worldwide enjoy more
than one billion servings of the Company's products each day.
P&G sells 300 brands to nearly five billion consumers in 140 countries. The
Company holds more patents on food and beverage technology than the three
largest U.S. food companies combined. In addition to Pringles and Sunny Delight,
P&G's food and beverage brands include Folgers{R}, Millstone{R}, Crisco{R} and
Jif{R}.
This news release contains forward-looking statements, as that term is
defined in the Private Securities Litigation Reform Act of 1995. In addition to
the risks and uncertainties noted in this news release, there are certain
factors that could cause results to differ materially from those anticipated by
some of the statements made. These include the finalization of definitive
agreements, the outcome of regulatory reviews, the successful transition of the
businesses to the new entity, entering into arrangements with independent
bottlers to expand the distribution of the products, achieving volume and growth
projections despite the competitive environment, implementing cost improvement
plans in manufacturing and overhead areas, meeting commodity and currency
forecasts as well as factors listed in The Coca-Cola Company's and The Procter &
Gamble Company's most recently filed Forms 10-K and 8-Ks.
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MEDIA CONTACTS:
P&G: Shanae Gibbs 513-945-6005 and 800-242-3408
The Coca-Cola Company: Ben Deutsch 404-676-5096