The Coca-Cola Company to Acquire Glaceau, Maker of Vitaminwater, for $4.1 Billion

Company News

Atlanta & Whitestone, May 25

The Coca-Cola Company today announced that it has reached an agreement to acquire Energy Brands, Inc., known as glaceau, and its full range of fast- growing, enhanced water brands, including vitaminwater. The acquisition, for $ 4.1 billion in cash, provides The Coca-Cola Company with a strong platform to grow its active lifestyle beverages.

The transaction is expected to be accretive to The Coca-Cola Company's earnings per share in the first full year following completion of the acquisition. "We welcome vitaminwater, the icon of active lifestyles, to Coca- Cola, the ultimate and enduring icon of refreshment," said Neville Isdell, chairman and chief executive officer of The Coca-Cola Company. "Glaceau has built a great business with high-quality growth, as well as a strong pipeline of innovative products and brands. We envision even faster growth for glaceau as part of Coca-Cola's enhanced range of brands for North American customers and consumers. We will manage this opportunity in a way that delivers attractive returns for our shareowners and also appropriately benefits our system," Mr.. Isdell concluded.

"This is an outstanding opportunity for both of our companies to build an expanded active lifestyle business, first in the United States and then around the world," said Muhtar Kent, president and chief operating officer of The Coca- Cola Company. "It sharpens even further our existing focus on re-establishing sustainable growth in our home market, strengthening our system, and leveraging acquisition opportunities to gain speed and capabilities in key categories. We're committed to winning by reigniting growth in our core business of sparkling beverages while becoming the fastest-growing still beverage company in North America. I am confident we have the strategy, focus and leadership team in North America to deliver on that promise.

"Glaceau and its brands also provide us with highly attractive longer-term international opportunities," Mr.. Kent added. "We look forward to discussing with glaceau's distributors and our bottling partners the best operating model for glaceau's routes-to-market."

Strategic Opportunity for Growth and Value Creation

The Company said that the acquisition of glaceau will expand the Company's ability to meet consumers' needs further across the entire spectrum of sparkling and still beverages. With its vitaminwater, smartwater, fruitwater and vitaminenergy brands, glaceau is uniquely positioned in key market categories, with a leading position in enhanced water and attractive brands in water and energy drinks. These categories are expected to make up a large portion of the beverage industry's volume and gross profit growth in North America through 2010.

"It's a perfect match connecting the hottest active lifestyle brand with the full resources of the world's best beverage company," said J. Darius Bikoff, glaceau founder and chief executive officer. "To best understand today's announcement, you really need to go out, buy a bottle of vitaminwater and try it for yourself to see how well it works."

Operational Structure Built for Success

Glaceau will operate as a separate business unit within Coca-Cola North America (CCNA). This structure will allow glaceau to continue to win in the marketplace by maximizing its focus, speed, sales and execution capabilities, while leveraging the scale of CCNA's resources in supply chain, marketing and consumer insights, large customer management and foodservice.

The Company noted that glaceau's top three executives (J. Darius Bikoff, Mike Repole, and Mike Venuti) intend to lead the business for a minimum of three years, and that other key managers will remain in the business.

"Glaceau has a great and talented management team, whose brand building and creativity will complement and strengthen our business in North America," said Sandy Douglas, president and chief operating officer of Coca-Cola North America. "Operating as a separate business unit within Coca-Cola North America, glaceau will continue to focus its passion and marketing experience to create excitement with consumers and customers.

"As people head out this summer, whether they are running along the beach, hiking in the mountains, or relaxing poolside, this combination ensures we are always within an arm's reach of their desires," added Douglas.

"We are excited that The Coca-Cola Company sees the explosive potential in our brands, and recognizes our people are the driving force behind the success of glaceau," said Mike Repole, president of glaceau.

The transaction, which is expected to close in the summer of 2007, is subject to customary regulatory review. The boards of both companies have approved the transaction.

Investor Conference Call and Webcast

The Company will host a conference call and webcast, with slides, for investors and analysts to discuss this transaction today at 8:30 a.m. (EDT). The Company invites investors to listen to the live audiocast of the conference call at its website, www.thecoca-colacompany.com, in the "Investors" section. A replay in downloadable MP3 format will also be available within 24 hours after the audiocast on the Company's website.

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For more information about The Coca-Cola Company, please visit our website at www.thecoca-colacompany.com.