Coca Cola European Partners offers 5.2 billion euros for the Australian bottler
Coca-Cola European Partners was created on 28 May 2016 as a result of the combination of the three main bottling companies in Europe.
Coca-Cola European Partners, the largest bottler in the Coca Cola group, has launched an offer to buy Coca-Cola Amatil in Australia. The operation, carried out by the Bloomberg agency, has been confirmed by the company before the CNMV. As detailed by the firm, the firm has addressed non-binding offers both to Coca Cola’s own parent company (which has 30.8% of Amatil’s capital) and to the shareholders who have the remaining 69.2%.
The offer consists of AU $ 12.75 per share, a 23% premium over the average price of the last week. Coca Cola would receive, for its part, A $ 9.57 per share. With these prices, the operation would be valued at 8,700 million Australian dollars, 5,200 million euros, with a total company value (including debt) of 10,800 million Australian dollars, or 6,500 million euros.
Once the due diligence process is complete, Amatil’s board expects to unanimously recommend the offer from Coca Cola European Partners, “in the absence of a superior offer.” The deal, if finally materialized, would be the largest acquisition by an Australian company. The price of Coca-Cola Amatil was suspended since Thursday pending an announcement about a “possible material transaction,” and today it has risen 15% to $ 12.31.
“We are really confident in the recovery of the business, but clearly there is uncertainty about the economic situation in the next two years, with the risk of new outbreaks that could disrupt the business,” said Coca-Cola Amatil CEO Alison Watkins. The price of the takeover bid, despite the premium paid, is below the Australian $ 13 pre-pandemic.
“This is a unique and tremendous opportunity to combine two of the best bottlers in the world, creating a broader and more balanced geographic footprint, including one of the most attractive and populated emerging markets, doubling our consumption reach to 600 million people.” , said Damien Gamell, CEO of Coca Cola European Partners.
Rothschild & Co is advising Coca-Cola European Partners, a company chaired by Spain’s Sol Daurella, and UBS Group AG is advising the Australian company. Coca Cola owns a 19.11% stake in Coca-Cola European Partners.
Coca Cola European Partners has also updated the figures for the third quarter. It has posted a 12% drop in revenue in the first nine months of the year, to 8,016 million euros, although in the last three months the decline is only 3%. Sales continue to fall, albeit at a slower pace, in the hospitality industry (down 17.5% over last year, after a 50% drop in the second quarter) and growth in households, although not by enough to offset the impact.
The company has also announced that it will reduce costs between 200 and 250 million this year in marketing operations, promotions or incentives, and will close the year with investments of 350 million. In addition, it has announced a dividend for 2020 of 0.85 euros, which represents a pay out of 50%.
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