Coca-Cola seeks more acquisitions to grow business
May 14, 2008
According to Reuters, Coca-Cola Co., the world''s biggest drinks maker, is seeking more acquisition opportunities in the fast-growing soft drinks market to expand its revenue sources, the company''s CEO-in-waiting said recently.
Sales of established soft drinks are declining in the United States as people opt for the likes of bottled water and tea, which they see as healthier.
Coca-Cola Chief Operating Officer Muhtar Kent, who is due to become chief executive officer on July 1, told reporters at the Foreign Correspondents'' Club of Japan that such acquisitions would not be large, and the company was looking from country to country for opportunities, though he didn''t specify where.
Coca-Cola, whose rivals include PepsiCo Inc. and Dr Pepper Snapple Group Inc., has benefited from its recent acquisition of FUZE teas and Glaceau vitamin water, which have helped boost the company''s sales.
The Atlanta-based company, which gets 78 percent of its sales abroad, also bought Russian juice maker Multon in 2005 for $500 million.
Kent said that the soft drinks market was growing faster than most other categories of consumer products such as cosmetics, toiletries and beers.
He also reiterated Coke''s long-term targets of increasing annual sales volume by 3 to 4 percent, operating income by six to eight percent and earnings-per-share by a high single-digit percentage rate.
On April 16, Coca-Cola reported a higher-than-expected quarterly profit as strong international growth offset the effects of a weak U.S. economy and flat sales volume at home.
Coke''s international business, especially in places like China, India, Brazil and Turkey, has grown more important to investors in recent years as growth slows in mature markets like North America.