REG - Coca-Cola Euro Ptnrs - CCEP Unaudited Pro Forma Combined Financial Info

Coca-Cola Europacific PartnersAnnouncement

20/04/2021 08:15

RNS Number : 9603V
  
Coca-Cola European Partners plc
  
20 April 2021
  
 

Coca-Cola European Partners plc ("CCEP") is disclosing the following unaudited pro forma condensed combined financial information prepared in connection with proposed financings of the Coca-Cola Amatil Limited (CCL) acquisition by CCEP.
 
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
 
In November 2020, CCEP and Coca-Cola Amatil Limited ("CCL") entered into a binding Scheme Implementation Deed for the acquisition  of 69.2% of the entire existing issued share capital of CCL, held by shareholders other than The Coca-Cola Company ("TCCC") for A$12.75 per share in cash less the second half 2020 dividend of A$0.18 per share declared by CCL on 18 February 2021 ("2H20 Dividend"), pursuant to a scheme of arrangement (the "Scheme"). CCL is one of the largest bottlers and distributors of ready to drink non-alcoholic and alcoholic beverages and coffee in the Asia Pacific region and is the authorized bottler and distributor of TCCC's beverage brands in Australia, New Zealand, Fiji, Indonesia, Papua New Guinea and Samoa.
 
CCEP made a further, best and final, offer in February 2021 in which it increased the Scheme consideration to A$13.50 per share in cash less the 2H20 Dividend.
 
CCEP has also entered into a Co-operation and Sale Deed with TCCC (the "Co-operation Agreement") which is conditional upon the implementation of the Scheme. Under the Co-operation Agreement, CCEP will acquire 10.8% of CCL shares from TCCC for A$9.57 per share in cash less the 2H20 Dividend and can acquire the remaining 20% of CCL's shares held by TCCC for A$10.75 per share less the 2H20 Dividend, either in cash or a combination of cash and the issue of CCEP shares at an agreed conversion ratio. In March 2021, in accordance with the Co-operation Agreement, CCEP elected to purchase the remaining 20% of CCL's shares held by TCCC for cash.
 
The Scheme and the Co-operation Agreement are referred to herein as the "Acquisition".
 
The Acquisition will be accounted for as a business combination using the acquisition method of accounting in accordance with International Financial Reporting Standards ("IFRS"). Accordingly, CCL's assets to be acquired and liabilities to be assumed have been adjusted based on preliminary estimates of fair value.
 
The following unaudited pro forma condensed combined financial information and related notes (the "Pro Forma Financial Information") is based on the historical consolidated financial statements of CCEP and the historical financial statements of CCL and has been prepared to reflect the Acquisition. The Acquisition together with the related financing are together referred to as the "Transaction."  The pro forma adjustments related to the Transaction include:
 



-


The acquisition of 100% of CCL by CCEP;




-


Reflecting the assets, liabilities, and non-controlling interests of CCL at their preliminary estimated fair values;




-


Proceeds and use of financings. Refer to Note 4 of the Pro Forma Financial Information; and,




-


The translation of CCL's financial information from Australian Dollars ("AUD" or A$) to Euros ("EUR" or €).



 
The Pro Forma Financial Information is derived from and should be read in conjunction with the most recent historical financial statements of CCEP and CCL. For both CCEP and CCL this is financial information as at and for the year ended 31 December 2020. The historical financial statements and related notes thereto of CCEP are filed with the US Securities and Exchange Commission as part of CCEP's Annual Report on Form 20-F for the year ended 31 December 2020. The historical financial statements and related notes thereto of CCL can be found on CCL's website at https://www.ccamatil.com/au/Investors/Financial-reporting and are not incorporated by reference herein or form a part hereof.
 
The unaudited pro forma condensed combined income statement for the year ended 31 December 2020 (the "Pro Forma Income Statement") gives effect to the Acquisition as if it had occurred on 1 January 2020, while the unaudited pro forma condensed combined statement of financial position at 31 December 2020 (the "Pro Forma Statement of Financial Position") gives effect to the Acquisition as if it had occurred on 31 December 2020. 
 
The Pro Forma Financial Information has not been prepared in accordance with the requirements of Regulation S-X of the US Securities Act of 1933, the Prospectus Regulation, or any generally accepted accounting standards. Refer to Note 1 of the Pro Forma Financial Information. 
 
The Pro Forma Financial Information has been prepared in order to illustrate the effects of the Acquisition on the financial position and results of operations of CCEP. It is based on information and assumptions that CCEP believes are reasonable, including assumptions regarding the terms of the Acquisition. The Pro Forma Financial Information has been prepared for illustrative purposes only and because of its nature, addresses a hypothetical situation. It does not intend to represent what CCEP's financial position or results of operations actually would have been if the Acquisition had been completed on the dates indicated, nor does it intend to represent, predict or estimate the results of operations for any future period or financial position at any future date. In addition, it does not reflect ongoing cost savings that CCEP expects to achieve as a result of the Acquisition or the costs necessary to achieve these cost savings or synergies. As pro forma information is prepared to illustrate retrospectively the effects of transactions that will occur in the future, there are limitations that are inherent to the nature of pro forma information. As such, had the Acquisition taken place on the dates assumed above, the actual effects would not necessarily have been the same as those presented in the Pro Forma Financial Information.
 
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020
 



























Transaction Accounting Adjustments








(in € millions, except where specified)






Historical CCEP






Adjusted CCL

(Note 2)






Inventory fair value adjustment

(Note 3(b))


Fixed asset depreciation adjustment

(Note 3(b))


Intangible asset amortization adjustment

(Note 3(b))


Transaction and related costs

(Note 3(b))


Total acquisition adjustments






Financing Adjustments

(Note 4)






CCEP pro forma combined




Revenue






10,606






2,929






-


-


-


-


-






-






13,535




Cost of sales






(6,871)






(1,737)






(29)


(9)


-


-


(38)






-






(8,646)




Gross Profit






3,735






1,192






(29)


(9)


-


-


(38)






-






4,889




Operating expenses






(2,922)






(1,022)






-


(2)


(21)


(92)


(115)






-






(4,059)




Operating profit






813






170






(29)


(11)


(21)


(92)


(153)






-






830




Finance income






33






20






-


-


-


-


-






-






53




Finance costs






(144)






(57)






-


-


-


(4)


(4)






(34)






(239)




Total finance costs, net






(111)






(37)






-


-


-


(4)


(4)






(34)






(186)




Non-operating items






(7)






(2)






-


-


-


-


-






-






(9)




Profit before taxes






695






131






(29)


(11)


(21)


(96)


(157)






(34)






635




Taxes






(197)






(44)






8


3


6


28


45






10






(186)




Profit after taxes






498






87






(21)


(8)


(15)


(68)


(112)






(24)






449




Profit attributable to shareholders






498






109






(21)


(8)


(15)


(68)


(112)






(24)






471




Profit attributable to non-controlling interests






-






(22)






-


-


-


-


-






-






(22)




Profit after taxes






498






87






(21)


(8)


(15)


(68)


(112)






(24)






449


































































(per share information in €)




























































Basic earnings per share:






1.09














































0.99




Diluted earnings per share:






1.09














































0.98


































































(share information in millions)




























































Basic weighted average number of shares






455














































455




Diluted weighted average number of shares






456














































456



 
The accompanying notes are an integral part of this unaudited pro forma condensed combined financial information.
 
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION
AS OF 31 DECEMBER 2020
 











Historical CCEP






Adjusted CCL

(Note 2)






Transaction Accounting Adjustments






CCEP total pro forma combined




(in € millions)






Preliminary purchase consideration and allocation

(Note 3(a))


Transaction and related costs

(Note 3(b))


Total acquisition adjustments






Financing Adjustments

(Note 4)








ASSETS:




















































Non-current:




















































Intangible assets






8,414






667






3,754


-


3,754






-






12,835




Goodwill






2,517






80






2,409


-


2,409






-






5,006




Property, plant and equipment






3,860






1,206






94


-


94






-






5,160




Non-current derivative assets






6






71






-


-


-






-






77




Deferred tax assets






27






5






-


-


-






-






32




Other non-current assets






337






61






-


-


-






-






398




Total non-current assets






15,161






2,090






6,257


-


6,257






-






23,508




Current:




















































Current derivative assets






40






13






-


-


-






-






53




Current tax assets






19






6






-


-


-






-






25




Inventories






681






356






29


-


29






-






1,066




Amount receivable from related parties


150 






33






-


-


-






-






183




Trade accounts receivable






1,439






504






-


-


-






-






1,943




Other current assets






224






154






-


-


-






-






378




Cash and cash equivalents






1,523






630






(5,766)


(96)


(5,862)






5,221






1,512




Total current assets






4,076






1,696






(5,737)


(96)


(5,833)






5,221






5,160




Total assets






19,237






3,786






520


(96)


424






5,221






28,668


























































LIABILITIES:




















































Non-current:




















































Borrowings, less current portion






6,382






1,311






-


-


-






4,721






12,414




Employee benefit liabilities






283






36






-


-


-






-






319




Non-current provisions






83






-






-


-


-






-






83




Non-current derivative liabilities






15






75






-


-


-






-






90




Deferred tax liabilities






2,134






143






1,215


-


1,215






-






3,492




Non-current tax liabilities






131






-






-


-


-






-






131




Other non-current liabilities






44






-






-


-


-






-






44




Total non-current liabilities






9,072






1,565






1,215


-


1,215






4,721






16,573




Current:




















































Current portion of borrowings






805






253






-


-


-






500






1,558




Current portion of employee benefit liabilities






13






51






-


-


-






-






64




Current provisions






154






-






-


-


-






-






154




Current derivative liabilities






62






40






-


-


-






-






102




Current tax liabilities






171






20






-


-


-






-






191




Amounts payable to related parties






181






87






-


-


-






-






268




Trade and other payables






2,754






763






-


-


-






-






3,517




Total current liabilities






4,140






1,214






-


-


-






500






5,854




Total liabilities






13,212






2,779






1,215


-


1,215






5,221






22,427


























































EQUITY




















































Share capital






5






1,179






(1,179)


-


(1,179)






-






5




Share premium






192






-






-


-


-






-






192




Merger reserves






287






-






-


-


-






-






287




Other reserves






(537)






121






(121)


-


(121)






-






(537)




Retained earnings






6,078






(490)






490


(96)


394






-






5,982




Equity attributable to shareholders






6,025






810






(810)


(96)


(906)






-






5,929




Non-controlling interests






-






197






115


-


115






-






312




Total equity






6,025






1,007






(695)


(96)


(791)






-






6,241



 
The accompanying notes are an integral part of this unaudited pro forma condensed combined financial information.
 
Note 1. Basis of preparation 
 
The Pro Forma Financial Information set forth herein is based upon the historical financial statements of CCEP and CCL and has been prepared to illustrate the effects of the Transaction as if it had occurred on:
 



-


1 January 2020 in respect of the Pro Forma Income Statement; and,




-


31 December 2020 in respect of the Pro Forma Statement of Financial Position.



 
The Pro Forma Financial Information is presented for illustrative purposes only and does not necessarily reflect the results of operations or the financial position that actually would have resulted had the Acquisition occurred at the dates indicated, or project the results of operations or financial position for any future dates or periods.
 
The Acquisition will be accounted for as a business combination using the acquisition method of accounting in accordance with IFRS. Accordingly, CCL's assets to be acquired and liabilities to be assumed have been adjusted based on preliminary estimates of fair value. Any excess of the purchase price over the fair value of identified assets acquired and liabilities assumed will be recognized as goodwill. The actual fair values will be determined upon the consummation of the Acquisition and may vary from these preliminary estimates.
 
The Pro Forma Financial Information does not reflect the cost of any integration activities or benefits from the Acquisition, including potential synergies that may be generated in future periods.
 
The historical financial statements of CCEP are prepared in accordance with IFRS and are presented in Euros. The historical financial statements of CCL are prepared in accordance with Australian Accounting Standards, which complies with IFRS and are presented in Australian Dollars. The Pro Forma Financial Information includes reclassifications and adjustments to conform CCL's historical accounting presentation to CCEP's accounting presentation, in each case for the relevant periods. The CCL income statement has been translated from Australian Dollars to Euros using the average monthly exchange rates for the periods of 0.6036. The CCL balance sheet has been translated from Australian Dollars to Euros using exchange rate at 31 December 2020 of 0.6184.
 
The estimated income tax impacts of the pre-tax adjustments that are reflected in the Pro Forma Financial Information are calculated using an estimated blended statutory rate of 29%, based upon the annual period ending 31 December 2020.  The blended statutory rate and the effective tax rate of the combined group could be significantly different depending on the post-transaction activities and geographical mix of profit before tax.
 
Note 2: Adjustments to CCL's financial statements 
 
The financial statements below illustrate the impact of adjustments made to CCL's financial statements in order to present them on a basis consistent with CCEP's accounting policies under EU IFRS. These adjustments reflect CCEP's best estimates based upon the information currently available to CCEP and could be subject to change once more detailed information is obtained. The CCL financial information has been adjusted to:
 



-


Present CCL's financial information on a basis consistent with the accounting policies adopted by CCEP; and




-


Translate from Australian Dollars to Euros, which is the presentation currency of CCEP.



 
UNAUDITED ADJUSTED CCL INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2020



 (in millions)






Historical CCL

AUD (A$)






Reclassifications

AUD (A$)

(Note 2(a))






Adjusted CCL

AUD (A$)






Adjusted CCL

EUR (€)

(Note 2(b))




Revenue






-






4,853






4,853






2,929




Trading revenue 






4,762






(4,762)






-






-




Cost of sales






-






(2,877)






(2,877)






(1,737)




Cost of goods sold






(2,862)






2,862






-






-




Delivery






(221)






221






-






-




Gross profit






1,679






297






1,976






1,192




Other revenues






39






(39)






-






-




Operating expenses






(1,438)






(256)






(1,693)






(1,022)




Operating profit






280






3






283






170




Finance income






33






-






33






20




Finance costs






(95)






-






(95)






(57)




Total finance costs, net






(62)






-






(62)






(37)




Non-operating items






-






(3)






(3)






(2)




Profit before tax






218






-






218






131




Taxes






-






(73)






(73)






(44)




Income tax expense






(73)






73






-






-




Profit after tax






145






-






145






87




Profit attributable to shareholders






-






180






180






109




Attributable to shareholders of Coca-Cola Amatil Limited






180






(180)






-






-




Profit attributable to non-controlling interests






(35)






-






(35)






(22)




Profit after tax






145






-






145






87



 
UNAUDITED ADJUSTED CCL BALANCE SHEET
AS OF 31 DECEMBER 2020



 (in millions)


Historical CCL

AUD (A$)






Reclassifications

AUD (A$)

(Note 2(a))






Adjusted CCL

AUD (A$)






Adjusted CCL

EUR (€)

(Note 2(b))




ASSETS:
































Non-current:
































Intangible assets


1,208






(130)






1,078






667




Goodwill


-






130






130






80




Investments


61






(61)






-






-




Defined benefit superannuation plans


7






(7)






-






-




Property, plant and equipment


1,519






432






1,951






1,206




Right of use assets


432






(432)






-






-




Non-current derivative assets


-






115






115






71




Derivatives


115






(115)






-






-




Deferred tax assets


8






-






8






5




Other non-current assets


-






99






99






61




Other receivables


1






(1)






-






-




Prepayments


18






(18)






-






-




Loans receivable interest bearing


12






(12)






-






-




Total non-current assets


3,381






-






3,381






2,090






































Current:
































Current derivative assets


-






22






22






13




Derivatives


22






(22)






-






-




Other financial assets at amortised cost


37






(37)






-






-




Current tax assets


10






-






10






6




Inventories


576






-






576






356




Amount receivable from related parties


-






53






53






33




Trade accounts receivable


-






815






815






504




Trade and other receivables


964






(964)






-






-




Other current assets


-






249






249






154




Other financial assets


30






(30)






-






-




Prepayments


86






(86)






-






-




Cash and cash equivalents


-






1,018






1,018






630




Cash assets


1,018






(1,018)






-






-




Total current assets


2,743






-






2,743






1,696




Total assets


6,124






-






6,124






3,786



 
UNAUDITED ADJUSTED CCL BALANCE SHEET
AS OF 31 DECEMBER 2020
 



(in millions) 


Historical CCL

AUD (A$)






Reclassifications

AUD (A$)

(Note 2(a))






Adjusted CCL

AUD (A$)






Adjusted CCL

EUR (€)

(Note 2(b))




LIABILITIES
































Non-current
































Borrowings, less current portion


-






2,120






2,120






1,311




Borrowings


1,693






(1,693)






-






-




Lease liabilities


427






(427)






-






-




Employee benefit liabilities


-






59






59






36




Employee benefits provisions


11






(11)






-






-




Defined benefit superannuation plans


48






(48)






-






-




Non-current derivative liabilities


-






122






122






75




Derivatives


122






(122)






-






-




Deferred tax liabilities


231






-






231






143




Total non-current liabilities


2,532






-






2,532






1,565






































Current:
































Current portion of borrowings


-






409






409






253




Borrowings


336






(336)






-






-




Lease liabilities


73






(73)






-






-




Current portion of employee benefit liabilities


-






82






82






51




Employee benefits provisions


82






(82)






-






-




Current derivative liabilities


-






65






65






40




Derivatives


65






(65)






-






-




Current tax liabilities


33






-






33






20




Amounts payable to related parties


-






141






141






87




Trade and other payables


1,295






(60)






1,235






763




Other financial liabilities


81






(81)






-






-




Total current liabilities


1,965






-






1,965






1,214




Total liabilities


4,497






-






4,497






2,779






































EQUITY
































Share capital


1,919






(13)






1,906






1,179




Treasury shares


(13)






13






-






-




Other reserves


-






194






194






121




Reserves


194






(194)






-






-




Retained earnings


-






(792)






(792)






(490)




Accumulated losses


(792)






792






-






-




Equity attributable to shareholders


1,308






-






1,308






810




Non-controlling interests


319






-






319






197




Total equity


1,627






-






1,627






1,007



 
(a)   Preliminary pro forma classification adjustments have been made to CCL's income statement and balance sheet in order to present them on a basis consistent with CCEP. These adjustments have not changed CCL's profit for the year, total assets or total liabilities. These adjustments reflect CCEP's best estimates based upon information currently available to CCEP and could be subject to change once more detailed information is obtained.
(b)   The CCL income statement has been translated from Australian Dollars to Euros using the average monthly exchange rates for the periods of 0.6036. The CCL balance sheet has been translated from Australian Dollars to Euros using exchange rate at 31 December 2020 of 0.6184.
 
Note 3: Transaction accounting adjustments - acquisition
 
(a)   Preliminary purchase consideration and allocation
 
The Acquisition is reflected in the Pro Forma Financial Information as being accounted for under the acquisition method in accordance with IFRS 3 - Business Combinations. Under this method the CCL assets acquired and liabilities assumed have been recorded on preliminary estimates of fair value. The final fair values will be determined upon the consummation of the Acquisition and may vary materially from these preliminary estimates.
 
The estimated purchase consideration, estimated fair values and residual goodwill are as follows:
 



Description








(in € millions, except where specified)


Amount




Consideration to public shareholders pursuant to the Scheme (in AUD)


6,673




Consideration to TCCC (in AUD)


2,265




Total purchase consideration (in AUD)


8,938




Total purchase consideration (in €)


5,766














Allocation of purchase consideration:








Net working capital (excluding inventory)


126




Inventory


385




Intangible assets


4,421




Property, Plant, and Equipment


1,300




Other non-current assets


132




Other non-current liabilities


(1,422)




Fair value of noncontrolling interests


(312)




Deferred taxes, net


(1,353)




Residual goodwill


2,489




Less CCL's historical goodwill


(80)




Goodwill adjustment


2,409



 
The preliminary allocation has been made based on limited access to information. CCEP will not have sufficient information to make final allocations until after the completion of the Acquisition.
 
The final determination of the accounting for the Acquisition is anticipated to be completed as soon as practicable after the completion of the Acquisition. CCEP anticipates that the valuations of the assets acquired and liabilities assumed in the Acquisition will include, but not be limited to, inventory, property, plant and equipment, intangible assets and borrowings. The valuations will consist of physical appraisals, discounted cash flow analyses or other appropriate valuation techniques to determine the fair value of the assets acquired and liabilities assumed.
 
The final consideration and amounts allocated to assets acquired and liabilities assumed in the Acquisition could differ materially from the preliminary amounts presented in the Pro Forma Financial Information. A decrease in the fair value of assets acquired or an increase in the fair value of liabilities assumed in the Acquisition from those preliminary valuations presented in the Pro Forma Financial Information would result in an increase in the amount of goodwill that will result from the Acquisition. In addition, if the value of the assets acquired is higher than the preliminary indication, it may result in higher amortization and depreciation expense than is presented in the Pro Forma Financial Information.
 
(i)            Consideration
The total cash consideration was translated from AUD to Euro using the 31 March 2021 exchange rate of 0.64516. The actual purchase consideration will be determined upon completion of the Acquisition.
 
(ii)           Inventory
The preliminary estimates of the fair value of inventory acquired is based on key assumptions and have been developed using publicly disclosed information for other acquisitions in the industry, CCEP's historical experience, data that were available in the public domain and CCEP's due diligence review of the business of CCL. These estimates will be finalized following completion of the Acquisition and additional values, if any, assigned to inventory. 
 
The fair value of CCL inventory on hand has been estimated as €356 million, representing a fair value uplift related to finished goods inventory from their historical costs of €29 million which is expected to be recognized within cost of sales within the first year following the close of the transaction. 
 
This adjustment has been tax affected using a blended statutory rate of 29% for the Pro Forma Income Statement.
 
(iii)          Intangible assets 
The preliminary estimates of the intangible assets acquired are based on key assumptions and have been developed using publicly disclosed information for other acquisitions in the industry, CCEP's historical experience, data that were available in the public domain and CCEP's due diligence review of the business of CCL. These estimates will be finalized following completion of the Acquisition and additional values, if any, assigned to CCL customer relationships or other identifiable intangible assets acquired.
 
The fair value and weighted average estimated useful life of identifiable intangible assets are estimated as follows:
 



Description
















(in € millions)


Fair value


Weighted-average estimated useful life


Annual amortization




Distribution rights, brand names and trademarks 


3,902


Indefinite


-




Other acquired identifiable intangible assets 


436


20


22




Total acquired identifiable intangible assets (excluding software and other intangibles)


4,338






22




Less CCL's book value of intangible assets (excluding software and other intangibles)


(584)












Adjustment to intangible assets, net


3,754











 
Based on the estimated fair values of identified intangible assets and the weighted average useful lives, the following adjustment to amortization expense (recognized within administrative expense) and associated income tax adjustments have been included in the Pro Forma Income Statement:
 



Description








(in € millions)


Year ended

31 December 2020




Amortization of identified intangible assets


22 




Less: CCL's intangible amortization per 31 December 2020 accounts (excluding software and other intangibles)


(1) 




Adjustment to amortization expense


21 



 
These adjustments have been tax affected using a blended statutory rate of 29% for the Pro Forma Income Statement.
 
(iv)          Property, plant and equipment
The preliminary estimates of the property, plant and equipment assets acquired are based on key assumptions and have been developed using publicly disclosed information for other acquisitions in the industry, CCEP's historical experience, data that were available in the public domain and CCEP's due diligence review of the business of CCL. These estimates will be finalized following completion of the Acquisition and additional values, if any, will be quantified.
 
The fair value and weighted average estimated remaining useful life of property, plant and equipment, excluding right of use assets, have been estimated as €1.03 billion (representing a fair value uplift of €94 million) and 7 years, respectively.
 
Based on the estimated fair values of property, plant and equipment, excluding right of use assets, and the weighted average remaining useful lives, an adjustment of €11 million has been recorded as an increase to depreciation expense.
 
These adjustments have been tax affected using a blended statutory rate of 29% for the Pro Forma Income Statement.
 
(v)           Non-controlling interests
The fair value of the non-controlling interest assumed represents the value recognized in CCL's 31 December 2020 consolidated balance sheet of €197 million increased by a fair value adjustment of €115 million to €312 million. This fair value adjustment represents the estimated enterprise value at the acquisition date that is attributable to non-controlling interests, inclusive of the associated deferred tax impact.
 
(vi)          Deferred tax liabilities
The total net deferred tax liability is estimated to be €1.35 billion, or a net increase of €1.21 billion. The net increase results from fair value adjustments related to intangible assets and property, plant and equipment discussed above.
 
(b)   Transaction and related costs
 
Reflects the accrual of non-recurring costs of €96 million related to the Acquisition, including, among others, fees paid for financial advisors, legal services, professional accounting services, and temporary financing related to the transaction. These costs are not reflected in the historical consolidated balance sheets of CCEP and CCL, but are reflected in the Pro Forma Statement of Financial Position, as a decrease to cash and cash equivalents and a corresponding decrease to retained earnings, and in the Pro Forma Income Statement for the year ended 31 December 2020, within operating expenses and finance costs as they will be expensed by CCEP and CCL as incurred. These costs are not expected to be incurred in any period beyond 12 months from the closing date of the Acquisition.
 
The adjustment to the Pro Forma Income Statement has been tax affected using a blended statutory rate of 29% for the Pro Forma Income Statement.
 
Note 4: Transaction related adjustments - financing
 
CCEP intends to borrow approximately €5.2 billion to fund the Acquisition. For purposes of this unaudited pro forma condensed combined financial information, CCEP has assumed that the new CCEP financing will consist of 4.7 billion Euro equivalent aggregate principal of Senior Notes, being a mix of Euro and USD denominated borrowings, and €500 million of short term financing of commercial paper. The USD denominated borrowings will be swapped into Euros using cross currency swaps.  For the purposes hereof, the new funds raised are assumed to be used for the Acquisition and costs and expenses of the Acquisition. The amount and type of financing could be different from that presented in these pro forma condensed combined financial statements.
 



Description








(in € millions)


Amount




Proceeds from commercial paper program


500




Pro forma adjustment to current portion of borrowings


500




Proceeds from senior notes


4,745




Less capitalised issuance costs


(24)




Pro forma adjustment to non-current portion of borrowings


4,721














Total borrowings


5,240




Weighted average interest rate


0.60%




Pro forma annual interest expense


31




Pro forma annual amortization of debt issuance costs


3




Pro forma adjustment to finance costs


34



 
CONTACTS
 



Company Secretariat
Clare Wardle
T +44 20 7355 8406


Investor Relations
Sarah Willett
+44 7970 145 218


Media Relations
Shanna Wendt
T +44 7976 595 168



 
ABOUT CCEP
 
Coca-Cola European Partners plc is a leading consumer goods company in Western Europe, making, selling & distributing an extensive range of non-alcoholic ready to drink beverages & is the world's largest Coca-Cola bottler based on revenue. Coca-Cola European Partners serves a consumer population of over 300 million across Western Europe, including Andorra, Belgium, continental France, Germany, Great Britain, Iceland, Luxembourg, Monaco, the Netherlands, Norway, Portugal, Spain & Sweden. The Company is listed on Euronext Amsterdam, the New York Stock Exchange, London Stock Exchange & on the Spanish Stock Exchanges, trading under the symbol CCEP. For more information about CCEP, please visit www.cocacolaep.com & follow CCEP on Twitter at @CocaColaEP.

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