Coca-Cola Amatil has confirmed that it has received a buy-out offer from Coca-Cola European Partners (CCEP). The $9.3 billion deal includes the acquisition of all shares held by its independent shareholders and the separate acquisition of Amatil shares held by The Coca-Cola Company.
The Coca-Cola Company currently owns about 30.8% of Amatil’s shares.
The proposal is for an all cash offer to be made to the independent shareholders of $12.75 per share, less any final dividends in 2H20. Coca-Cola Amatil shares were up 14.9% this morning following the announcement.
Amatil Chairman Ilana Atlas confirmed Amatil’s Related Party Committee (RPC) had considered the proposal “with the objective of maximising value for the independent shareholders”.
“[It] has unanimously determined that, based on the current price and conditions of the proposal, it is now in their best interests of Independent Shareholders to allow CCEP to undertake confirmatory due diligence and further negotiate transaction documentation in order to determine if a binding proposal can be presented to independent shareholders,” she said.
If confirmatory due diligence is completed Amatil’s RPC, together with Group Managing Director Alison Watkins, intend to unanimously recommend the offer to independent shareholders.
CCEP is the world’s largest Coca-Cola bottler by revenue, with 48 production sites in locations including Germany, Spain, Great Britain. Coca-Cola Amatil has 32 production facilities in Australia, New Zealand, Fiji, Indonesia and Papua New Guinea.
Alcohol performing strongly
In a trading update, Amatil said its results improved in the September quarter, down 4.2% year on year, an improvement on the 1H20 decline of 9.2%.
In Alcohol, spirits were up 23.1% in 3Q20 driven by the Jim Beam trademark and
continued strong at-home consumption. Beer and Cider in 3Q20 were up 2.8% year on year, with strong performance by Feral in Western Australia.
Amatil said it was “well placed to capitalise on the all-important 4Q20 Christmas trading period”.
Analysts had been expecting Amatil to announce today that it was acquiring Asahi’s cider brands – Strongbow, Bonamy’s and Little Green – and the Australian rights to beer brands Stella Artois and Beck’s.
Asahi was required to sell the brands to satisfy the Australian Competition & Consumer Commission after buying Carlton & United Breweries from AB InBev in a $16billion deal.
Investment bank Rothschild has been running an auction for the brands it was required to offload. Final offers were received several week ago, with Amatil and Heineken reported to be the front runners.
The Australian has speculated that CCEP would “be against any deal involving Coca-Cola Amatil acquiring a beer business”, given that it tends to steer clear of the alcoholic beverages market.
However, Atlas said the proposal did not preclude Amatil from undertaking bolt on acquisitions.
“We’ve agreed terms with CCEP that would allow us to continue to progress any material transactions that … are strategically logical and add value for the long term,” she said.