FTC approves Coca-Cola’s $3.4B bottler deal if it limits access to Dr Pepper information

FTC OKs Coca-Cola bottler deal with conditions

WASHINGTON — Regulators have approved Coca-Cola Co.’s $3.4 billion buyout of the North American operations of its largest bottler on the condition that the soft drink maker restrict its access to business information from rival Dr Pepper Snapple Group Inc.

The Federal Trade Commission said Monday that according to a settlement, Coca-Cola will set up a “firewall” so that its ownership of the bottler won’t give it access to marketing information and plans for Dr Pepper Snapple, which had an existing deal with the bottler.

Coca-Cola said in a news release it was pleased wtih the regulatory clearance. A message left with Dr Pepper Snapple was not immediately returned.

In June, Coca-Cola announced it would pay $715 million to Dr Pepper Snapple for the rights to distribute Dr Pepper and Canada Dry in the U.S. after the bottler deal goes through.

Coca-Cola announced the deal to buy the North American operations of Coca-Cola Enterprises in February. Coca-Cola Entprises shareholders are scheduled to vote on the deal on Friday.

The regulatory order announced Monday is subject to public comment for 30 days, and then the commission will make it final. The FTC said the order, if approved, will expire in 20 years.

The FTC said Atlanta-based Coca-Cola, the world’s largest soft drink maker, and Dr Pepper, the No. 3 soft-drink maker in the U.S., are direct competitors in the market. Soft drink makers make and sell their concentrate to bottlers, who then turn it into drinks sold at retail. The FTC estimates the concentrate market is worth about $9 billion a year, and the total sales of U.S. soft drinks sold by retailers is about $70 billion.

Coca-Cola will become Dr Pepper’s largest distributor, with about 42 percent of its business.

Rival PepsiCo Inc. has 39 percent, and independent bottlers distribute the remaining 19 percent.

In December, Plano, Texas-based Dr Pepper made a similar deal with Pepsi for $900 million. Both Coca-Cola and PepsiCo are trying to gain more control over their bottlers and distributors, hoping to get new drinks on shelves more quickly to keep up with changing tastes. PepsiCo closed in the first quarter on a deal valued at $7.8 billion to buy Pepsi Bottling Group and PepsiAmericas.

Shares of Coca-Cola dipped 2 cents to $58.60 Monday. Shares of Dr Pepper Snapple fell 13 cents to $34.82.