Global Processing

Australian brewery launches bid for Coca-Cola Amatil

November 17, 2008

Lion Nathan Ltd, Australia''s second-largest brewer, launched a A$7.6 billion bid for soft drinks group Coca-Cola Amatil, the latest move in a wave of industry consolidation, according to Reuters. The cash and stock bid, pitched at a 25 percent premium to Coca-Cola Amatil''s share price, sent the target''s shares up to a record high, but the shares eased to trade below the offer value as Coca-Cola Amatil said the bid had material weaknesses and looked cheap, based on recent deals. A takeover of Coca-Cola Amatil, 30 percent-owned by U.S.-based The Coca-Cola Company, would give Lion Nathan a 60 percent share of Australia''s A$10.3 billion soft drinks market as well as a canned fruits and vegetables business. Lion Nathan, 46 percent owned by Kirin Brewery Co said the deal made sense as there was little cannibalization between the businesses, but could generate A$100-A$130 million mostly in savings on distribution to pubs, restaurants and caterers. Recent months have seen a flood of consolidation among global brewers. Analysts say that Coca-Cola Amatil will struggle to defend the takeover given uncertain markets and a slower Australian economy.