Great value after three-way merger?

Coca Cola Enterprises Inc. has merged with Coca-Cola Iberian Partners & Erfrischungsgetranke AG to form Coca Cola European Partners (NYSE: CCE). This has created the worlds largest independent bottler by net sales.

Share prices fell to $37.80 on May 31 2016 after the merger. Although the debt/equity ratio is relatively high in comparison to competitors, the dividend yield of 3% is above industry average. The P/E ratio is also significantly lower than the industry average.  Previously the growth rate of the company was forecast as low, but after the merger I think the growth rate will be better than forecast.

All 3 Prior companies had a good annual growth rate. The stock briefly fell lower than anticipated because of market sentiment but is quickly, at the time of writing, rebounding. I think the stock would be a good Buy & hold for the coming months and will outperform the market.

As a primarily European based company (97% of its’ production base in the UK) there may be increased volatility in the stock with the EU referendum, however any fluctuation will probably recover quickly into next year.

EDIT: After writing this, Goldman Sachs has upgraded the stock to a “buy” rating valuing its intrinsic value at $46.