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SunTrust sells 9 pct of holdings in Coca-Cola, reviews remaining shares

SunTrust sells 9 pct of holdings in Coca-Cola, reviews remaining shares

SunTrust Banks Inc. _ so closely linked to Coca-Cola that it has held the beverage giant's secret formula in one of its vaults for 88 years _ said Tuesday it has sold 9 percent of its holdings in Coca-Cola stock and will decide by the end of the year what to do with its remaining stake.
SunTrust said the sale of 4.5 million Coca-Cola shares returns $150 million (euro111 million) in after-tax value to its own shareholders.
The Atlanta-based financial institution said the proceeds from the sale of the Coca-Cola shares will be used to partly fund the repurchase of $750 million (euro554 million) to $1 billion (euro740 million) of its own stock.
SunTrust also said it will continue a comprehensive review of its balance sheet and business lines to identify underperforming assets.
James M. Wells III, who became chief executive of SunTrust in January, said in a statement that SunTrust values its relationship with Coca-Cola, but made its decision regarding the Coca-Cola shares it sold as part of its focus on "enhancing shareholder value."
Wells said that decision "reflects the pace we believe appropriate in today's challenging environment for banks," as do other initiatives to drive shareholder value.
SunTrust had owned 48.2 million shares of Coca-Cola stock as of March 31. Those shares had a market value of $2.3 billion (euro1.7 billion) at the time, according to a SunTrust regulatory filing Tuesday.
A spokesman for The Coca-Cola Co., Dana Bolden, said his company, which also is based in Atlanta, has a "strong business relationship with SunTrust and won't comment on their capital management strategies."
Bolden would not speculate on whether Coca-Cola would move its formula to another bank if SunTrust sells the remaining roughly 43.7 million shares of Coca-Cola stock it owns. The formula has been in a SunTrust vault since 1919, the same year as Coca-Cola's initial public offering. SunTrust provided underwriting services to Coca-Cola when it went public and received some of Coca-Cola's first publicly traded stock for its services.
As of March 31, SunTrust, which operates primarily in the Southeast and Mid-Atlantic region, had total assets of $186.4 billion (euro137.7 billion) and total deposits of $123.4 billion (euro91.1 billion). Coca-Cola is the world's largest beverage maker.
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On the Net:
http://www.suntrust.com
http://www.coca-cola.com