Coca-Cola To Acquire Orangina

Coca-Cola Co. (Atlanta) has signed a $758 million deal to acquire the soft drink brand Orangina from French beverage company Pernod Ricard—an acquisition blocked by France for nearly 18 months.

The companies announced in a joint press release that the new agreement is intended to respond to the concerns of French competition authorities by excluding Coca-Cola from distributing Orangina in French restaurants, bars and hotels for 10 years. Coke will be allowed to sell the orange-flavored drink in French stores for customers to take home, which makes up some 80% of the market for the drink in that country. The restriction does not apply to Coke's rights to sell Orangina in other countries.

Pernod originally announced plans to sell Orangina to Coca-Cola in December 1997, but the government blocked the purchase. Orangina's distribution rights in the French on-premise market had been the main sticking point. Last month, France's highest judicial authority upheld the French government's veto on Coca-Cola's acquisition of Orangina.

Other soft drinks companies, including Pepsico Inc., rely on Orangina's distribution network in the French market. The government was concerned that these companies would lose their distribution outlet if not given the time to find a new partner.