Coca-Cola Amatil receives $9.28bn offer to merge with European distributor
Coca-Cola’s Australian and European distributors are set to merge into a single entity after Coca-Cola European Partners lodged an offer for Coca-Cola Amatil (CCA) valuing the business at A$9.28 billion.
The bid – which is non-binding – would see the European company buy the 69.2-per-cent stake of CCA which is not owned by The Coca-Cola Company (TCCC), the original US business. This would be done via a scheme of arrangement which has already been endorsed by the independent directors of CCA.
CCA is one of the region’s largest bottlers and distributors of ready-to-drink non-alcoholic beverages, liquor and coffee in the Asia-Pacific. Besides the Australian market, it has a heavy presence in Indonesia and the Pacific Islands.
The European company has already entered an agreement over terms to purchase TCCC’s 30.8-per-cent stake, subject to Australian regulatory approvals and the acceptance of the scheme of arrangement by independent shareholders.
Subject to due diligence and various conditions being met, CCA’s board of directors “intends to unanimously recommend the scheme to independent shareholders, in the absence of a superior proposal and subject to an independent expert concluding” that the scheme is fair and reasonable.
The two companies say the proposed merger would create a broader and more balanced footprint for the European business while almost doubling its consumer market. The company said it would ultimately “drive sustainable and faster growth through geographic diversification and scale”.
The scheme comprises a cash payment of A$12.75 per share, which represents a 38-per-cent premium on the three-month volume weighted average price of CCA’s shares. TCCC would be paid A$9.57 per share for 10.8 per cent of its holding with the balance subject to a separate agreement on cross shareholding.
The deal would represent a 10.9-times multiple on CCA’s post-tax profit during the pre-Covid-19 2019 trading year.