Coca-Cola will buy its bottler in order to condense its supply chain.Earlier this year, Coca-Cola announced its intention to buy its largest North American bottling operation in order to streamline a complex supply chain and compete more effectively with soda rival PepsiCo.

In August of last year, PepsiCo announced its plan to incorporate its own two largest bottling operations for $7.8 billion. Even so, Coca-Cola remained staunchly opposed to such a merger, publicly stating its commitment to remaining separate from the other components of its supply chain.

Now, in what CEO Muhtar Kent called not a reversal but "an evolution" of strategy, changing consumer tastes have caused the soda giant to change its mind. Coca-Cola has recognized the need for cost-saving measures in a struggling economy where people are skipping luxury purchases like soda and those who still have disposable income are switching to healthier alternatives such as juice and tea in the wake of the health food craze.

Coca-Cola's deal will require the company to cash out its 34 percent stake in bottler Coca-Cola Enterprises, worth $3.4 billion, and assume $8.9 billion in debt by acquiring the company. The takeover, however, will allow the company more control over where its products appear and how much they cost, since it will control more than 90 percent of the bottling done in North America. PepsiCo's deal allows it to control only 80 percent of its own bottling.

Earlier this week, the Atlanta Journal-Constitution revealed Coca-Cola's plans for its new 30-person leadership structure in the wake of the merger, which will include 23 top Coca-Cola executives and six employees from Coca-Cola Enterprises.

The deal with Coca-Cola Enterprises, which Coca-Cola called "cashless," is expected to be completed by the end of the year.
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