Coca-Cola Amatil has called off its $A7 billion takeover talks with Lion Nathan, saying its US-based parent has rejected the proposal.
Coca-Cola Company, which owns a 30% stake in Australia-based Coca-Cola Amatil (CCA), has written to Lion Nathan’s major shareholder, Japan’s Kirin Holdings, calling off discussions, CCA says in a statement.
Australian drinks company Coca-Cola Amatil is seeking permission from the Commerce Commission to acquire cordial maker Baker Hall.
The New Zealand unit of Coca-Cola Amatil wants to buy the bottling production line, brands and business assets of Baker Hall from Old Fashioned Foods Ltd.
Lion has 52 percent of the New Zealand beer market while Coca-Cola Amatil has 53 percent of the New Zealand non-alcoholic ready-to-drink market and 75 percent of the carbonated soft drink market.
Alcoholic drinks maker Lion Nathan says its proposed $8 billion takeover of Coca-Cola Amatil would yield as much as $130 million in annual savings. The soft-drinks maker, though, has given the scheme of arrangement a cool response.
To finance the $4.5 billion cash component of the bid, Lion Nathan will place 327 million new shares with its major shareholder, Japanese food and beverages giant Kirin Holdings at a price of $11.50 per share. It will also take on $800 million in debt.
The company sought to allay concerns over the influence wielded by Kirin, whose stake would increase to 47.5%, from 46.1%, after the issue of the new shares.
Lion Nathan Ltd., Australia’s second- largest brewer, offered to buy Coca-Cola Amatil Ltd. for A$7.6 billion ($4.9 billion) in cash and stock to create a company selling everything from beer to soda, juice and wine.
Lion Nathan Ltd. and Coca-Cola Amatil Ltd. have been in merger talks the past six months that might create an A$11 billion ($7.1 billion) beverages company covering everything from beer to water, juice and soft drink, the Australian Financial Review reported.
The talks also include Lion Nathan’s majority stakeholder Kirin Holdings Co Ltd. and The Coca-Cola Company, the newspaper reported, citing people it didn’t name. Macquarie Capital Advisers is working with Coca-Cola Amatil while Caliburn Partnership is advising Lion Nathan, the Review said.
The new brewery will have a capacity of around 500,000 hectolitres per year, employing 100 to 120 personnel and is expected to be opened by 2010. The required investment for the project is $30m. The brewery will be jointly funded by SAB Miller and Coca Cola and as of June 2008 is going through a planning application phase.