Coca-Cola European Goes Global With $6.6 Billion Deal, , on October 26, 2020 at 9:23 am

Financial News
By High West Capital Partners
On October 26, 2020
In Financial News
Tags:

(Bloomberg) — Coca-Cola European Partners Plc agreed to buy Australian bottler Coca-Cola Amatil Ltd., creating a global producer of packaged beverages to better withstand a slowdown in the industry and the shift away from sugary drinks.The purchase values Sydney-based Coca-Cola Amatil at A$9.23 billion ($6.6 billion), a 19% premium to where its shares traded last week. The target’s board intends to unanimously recommend the offer.The A$12.75-per-share cash deal would double the European company’s potential market at a stroke, putting almost 300 million consumers within reach in the Southern Hemisphere, including the key developing nation of Indonesia.Such growth opportunities are all the more attractive in an industry facing slowing sales, partly due to the coronavirus pandemic, but also amid a broader shift by health-conscious consumers. Beyond fizzy staples like Coca-Cola, Fanta and Sprite, the Australian company has diversified into whiskey, rum and tequila, as well as beer and ground coffee.‘Scale Up’Damian Gammell, chief executive officer of Coca-Cola European Partners, said the acquisition would create “a broader and more balanced geographic footprint” that will “enable us to scale up even faster.”Coca-Cola Amatil has 32 production facilities in Australia, New Zealand, Fiji, Indonesia and Papua New Guinea, according to its website. The company changed its structure last year around more geographically-focused units.The proposed acquisition, the largest deal involving an Australian company so far this year, would mark the first major cross-border transaction in the country since the pandemic curtailed much of the year’s merger activity. Bloomberg News reported the companies were in talks on Saturday.Coca-Cola Amatil stock soared 16% to close at A$12.50 in Sydney on Monday, shy of the offer value. The deal is subject to due diligence by Coca-Cola European Partners, which rose 8.5% to 35.25 euros in early London trading.“It’s not a once-in-a-lifetime bid, but it’s around the right price for Amatil shareholders,” said Daniel Mueller, a fund manager at Vertium Asset Management in Sydney, which owns Coca-Cola Amatil shares. “It’s a very difficult stock to take over without the parent’s permission, so getting a control premium is an achievement.”Revenue FallsIt’s a sensible time to buy Coca-Cola Amatil from an earnings perspective, as drinks demand should benefit from an easing of Covid-19 restrictions in Australia, Mueller said.Coca-Cola European Partners on Monday reported a 3% slump in third-quarter revenue to 3.18 billion euros ($3.76 billion), and declined to provide full-year financial guidance because of uncertainty over the pandemic.The company will enter a separate agreement to buy Atlanta-based Coca-Cola Co.’s 31% stake in the target on less favorable terms than those offered to other shareholders. It will pay Coca-Cola A$9.57 a share in cash for 11% of the Australian company, and also work with Coke to buy its remaining 20% stake.Coca-Cola has been transforming itself through takeovers as soft drinks face pressure from government authorities over an obesity crisis and consumers increasingly favor lower-calorie options. It has grown in dairy and bought U.K. coffee chain Costa, while ceding bottling operations in India and acquiring others in Africa.Largest BottlerCoke is streamlining its structure, going from 17 global business units to nine and eyeing layoffs in North America and Europe following buyout packages. The company is also cutting the number of products it sells, with a goal of offering about 200 master brands, a 50% reduction from the current level.Coca-Cola European Partners is the world’s largest Coke bottler by revenue, with 48 production sites in Germany, Spain, Great Britain and elsewhere, according to its website. It was created from the three-way merger of Coca-Cola Enterprises Inc., Coca-Cola Iberian Partners and Germany’s Coca-Cola Erfrischungsgetranke AG in 2015.The biggest shareholder is Cobega, an investment vehicle belonging to Spain’s Daurella family, followed by the U.S. parent company, Bloomberg data show.The European bottler decided early this year to halt its buyback program and defer a dividend to preserve cash.Coca-Cola Amatil has been named as a potential bidder for Australian liquor assets being sold by Japan’s Asahi Group Holdings Ltd., which could require a capital raise, according to analysts at Citigroup Inc.(Updates with Coca-Cola European shares, revenue figures from eighth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.,

Coca-Cola European Goes Global With $6.6 Billion Deal(Bloomberg) — Coca-Cola European Partners Plc agreed to buy Australian bottler Coca-Cola Amatil Ltd., creating a global producer of packaged beverages to better withstand a slowdown in the industry and the shift away from sugary drinks.The purchase values Sydney-based Coca-Cola Amatil at A$9.23 billion ($6.6 billion), a 19% premium to where its shares traded last week. The target’s board intends to unanimously recommend the offer.The A$12.75-per-share cash deal would double the European company’s potential market at a stroke, putting almost 300 million consumers within reach in the Southern Hemisphere, including the key developing nation of Indonesia.Such growth opportunities are all the more attractive in an industry facing slowing sales, partly due to the coronavirus pandemic, but also amid a broader shift by health-conscious consumers. Beyond fizzy staples like Coca-Cola, Fanta and Sprite, the Australian company has diversified into whiskey, rum and tequila, as well as beer and ground coffee.‘Scale Up’Damian Gammell, chief executive officer of Coca-Cola European Partners, said the acquisition would create “a broader and more balanced geographic footprint” that will “enable us to scale up even faster.”Coca-Cola Amatil has 32 production facilities in Australia, New Zealand, Fiji, Indonesia and Papua New Guinea, according to its website. The company changed its structure last year around more geographically-focused units.The proposed acquisition, the largest deal involving an Australian company so far this year, would mark the first major cross-border transaction in the country since the pandemic curtailed much of the year’s merger activity. Bloomberg News reported the companies were in talks on Saturday.Coca-Cola Amatil stock soared 16% to close at A$12.50 in Sydney on Monday, shy of the offer value. The deal is subject to due diligence by Coca-Cola European Partners, which rose 8.5% to 35.25 euros in early London trading.“It’s not a once-in-a-lifetime bid, but it’s around the right price for Amatil shareholders,” said Daniel Mueller, a fund manager at Vertium Asset Management in Sydney, which owns Coca-Cola Amatil shares. “It’s a very difficult stock to take over without the parent’s permission, so getting a control premium is an achievement.”Revenue FallsIt’s a sensible time to buy Coca-Cola Amatil from an earnings perspective, as drinks demand should benefit from an easing of Covid-19 restrictions in Australia, Mueller said.Coca-Cola European Partners on Monday reported a 3% slump in third-quarter revenue to 3.18 billion euros ($3.76 billion), and declined to provide full-year financial guidance because of uncertainty over the pandemic.The company will enter a separate agreement to buy Atlanta-based Coca-Cola Co.’s 31% stake in the target on less favorable terms than those offered to other shareholders. It will pay Coca-Cola A$9.57 a share in cash for 11% of the Australian company, and also work with Coke to buy its remaining 20% stake.Coca-Cola has been transforming itself through takeovers as soft drinks face pressure from government authorities over an obesity crisis and consumers increasingly favor lower-calorie options. It has grown in dairy and bought U.K. coffee chain Costa, while ceding bottling operations in India and acquiring others in Africa.Largest BottlerCoke is streamlining its structure, going from 17 global business units to nine and eyeing layoffs in North America and Europe following buyout packages. The company is also cutting the number of products it sells, with a goal of offering about 200 master brands, a 50% reduction from the current level.Coca-Cola European Partners is the world’s largest Coke bottler by revenue, with 48 production sites in Germany, Spain, Great Britain and elsewhere, according to its website. It was created from the three-way merger of Coca-Cola Enterprises Inc., Coca-Cola Iberian Partners and Germany’s Coca-Cola Erfrischungsgetranke AG in 2015.The biggest shareholder is Cobega, an investment vehicle belonging to Spain’s Daurella family, followed by the U.S. parent company, Bloomberg data show.The European bottler decided early this year to halt its buyback program and defer a dividend to preserve cash.Coca-Cola Amatil has been named as a potential bidder for Australian liquor assets being sold by Japan’s Asahi Group Holdings Ltd., which could require a capital raise, according to analysts at Citigroup Inc.(Updates with Coca-Cola European shares, revenue figures from eighth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

,

Instant Quote

Enter the Stock Symbol.

Select the Exchange.

Select the Type of Security.

Please enter your First Name.

Please enter your Last Name.

Please enter your phone number.

Please enter your Email Address.

Please enter or select the Total Number of Shares you own.

Please enter or select the Desired Loan Amount you are seeking.

Please select the Loan Purpose.

Please select if you are an Officer/Director.

High West Capital Partners, LLC may only offer certain information to persons who are “Accredited Investors” and/or “Qualified Clients” as those terms are defined under applicable Federal Securities Laws. In order to be an “Accredited Investor” and/or a “Qualified Client”, you must meet the criteria identified in ONE OR MORE of the following categories/paragraphs numbered 1-20 below.

High West Capital Partners, LLC cannot provide you with any information regarding its Loan Programs or Investment Products unless you meet one or more of the following criteria. Furthermore, Foreign nationals who may be exempt from qualifying as a U.S. Accredited Investor are still required to meet the established criteria, in accordance with High West Capital Partners, LLC’s internal lending policies. High West Capital Partners, LLC will not provide information or lend to any individual and/or entity that does not meet one or more of the following criteria:

1) Individual with Net Worth in excess of $1.0 million. A natural person (not an entity) whose net worth, or joint net worth with his or her spouse, at the time of purchase exceeds $1,000,000 USD. (In calculating net worth, you may include your equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Your inclusion of equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.)

2) Individual with $200,000 individual Annual Income. A natural person (not an entity) who had individual income of more than $200,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

3) Individual with $300,000 Joint Annual Income. A natural person (not an entity) who had joint income with his or her spouse in excess of $300,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

4) Corporations or Partnerships. A corporation, partnership, or similar entity that has in excess of $5 million of assets and was not formed for the specific purpose of acquiring an interest in the Corporation or Partnership.

5) Revocable Trust. A trust that is revocable by its grantors and each of whose grantors is an Accredited Investor as defined in one or more of the other categories/paragraphs numbered herein.

6) Irrevocable Trust. A trust (other than an ERISA plan) that (a)is not revocable by its grantors, (b) has in excess of $5 million of assets, (c) was not formed for the specific purpose of acquiring an interest, and (d) is directed by a person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Trust.

7) IRA or Similar Benefit Plan. An IRA, Keogh or similar benefit plan that covers only a single natural person who is an Accredited Investor, as defined in one or more of the other categories/paragraphs numbered herein.

8) Participant-Directed Employee Benefit Plan Account. A participant-directed employee benefit plan investing at the direction of, and for the account of, a participant who is an Accredited Investor, as that term is defined in one or more of the other categories/paragraphs numbered herein.

9) Other ERISA Plan. An employee benefit plan within the meaning of Title I of the ERISA Act other than a participant-directed plan with total assets in excess of $5 million or for which investment decisions (including the decision to purchase an interest) are made by a bank, registered investment adviser, savings and loan association, or insurance company.

10) Government Benefit Plan. A plan established and maintained by a state, municipality, or any agency of a state or municipality, for the benefit of its employees, with total assets in excess of $5 million.

11) Non-Profit Entity. An organization described in Section 501(c)(3) of the Internal Revenue Code, as amended, with total assets in excess of $5 million (including endowment, annuity and life income funds), as shown by the organization’s most recent audited financial statements.

12) A bank, as defined in Section 3(a)(2) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

13) A savings and loan association or similar institution, as defined in Section 3(a)(5)(A) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

14) A broker-dealer registered under the Exchange Act.

15) An insurance company, as defined in Section 2(13) of the Securities Act.

16) A “business development company,” as defined in Section 2(a)(48) of the Investment Company Act.

17) A small business investment company licensed under Section 301 (c) or (d) of the Small Business Investment Act of 1958.

18) A “private business development company” as defined in Section 202(a)(22) of the Advisers Act.

19) Executive Officer or Director. A natural person who is an executive officer, director or general partner of the Partnership or the General Partner, and is an Accredited Investor as that term is defined in one or more of the categories/paragraphs numbered herein.

20) Entity Owned Entirely By Accredited Investors. A corporation, partnership, private investment company or similar entity each of whose equity owners is a natural person who is an Accredited Investor, as that term is defined in one or more of the categories/paragraphs numbered herein.

Please read the notice above and check the box below to continue.

Singapore

168 Robinson Road,
Capital Tower, Singapore 068912
+65 3105 1295

Taiwan

5th Floor, No. 1-8, Section 5, Zhongxiao East Road, Taipei

Hong Kong

R91, 3rd Floor,
Eton Tower, 8 Hysan Ave.
Causeway Bay, Hong Kong
+852 3002 4462

Australia

44 Martin Place, Sydney 2000 Australia
+02 8319 3232

Indonesia

Millennium Centennial Center, 38th Floor, Jl. Jend. Sudirman Kav. 25
Jakarta 12920, Indonesia

Market Coverage