Coca-Cola Buys Half of Peru Soft Drink, Rights to Global Distribution...And Unveils Its Own Bottled Water in the United States.

The Coca-Cola Company and Corporacion Inca Kola announced the formation of a partnership to market and distribute Inca Kola and its allied brands, Diet Inca Kola, Bimbo and Frugos, in Peru. The deal also calls for Coke to market and distribute Inca Kola brands worldwide. In addition to Peru, Inca Kola currently is available in 18 U.s. states, Ecuador, Spain, France and Japan. Johnny Lindley, the current chairman of Corporacion Inca Kola, will be chairman of the new joint venture. Also, the venture will allow Coke to purchase a 20 percent stake in Corporacion Jose R. Lindley S.A., the Luna bottler of Inca Kola and the largest bottler in the Inca Kola system.

Inca Kola is the leading local soft drink in Latin America, Coke's biggest competitor in that market, and one of the two leading brands in Peru. (The other leading brand is Coke.) A yellow, carbonated soft drink with a fruity flavor, Inca Kola was introduced in 1935.

Analysts said Coke has long wanted to purchase the cola. Coke called the purchase a "strategic partnership," not a takeover as some Peruvians had feared. News reports suggest Coke would pay about $200 million in the deal.

Inca Kola and Inca Kola Diet account for 30 percent of soft drink sales in Peru, and Coca-Cola and Coca-Cola Light 28 percent, analysts said. Coke officials say their figures show that Coca-Cola soft drinks have 34 percent of the Peruvian market compared to 32 percent for Inca Kola products.

Coke lately has been winning its battle with PepsiCo, Inc. for market share in Latin America's large soft drink market. Through a series of strategic acquisitions and aggressive advertising campaigns, Coke has emerged as the dominant beverage maker and bottler in every major Latin American country, say analysts. Last year, Latin America accounted for about 25 percent of Coke's total volume sold.

Peru, where Coke and Inca Kola each control about a third of the soft drink market, is the only Latin American country where a local company has been a significant competitor for Coke.