U.S. Markets closed

UPDATE 2-Coca-Cola's European bottler sweetens takeover offer for Aussie peer Amatil

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

(Adds details on offer, analyst comment, background and shares)

Feb 15 (Reuters) - The European bottling arm of Coca-Colahas sweetened its final, binding takeover offer for Australiancounterpart Coca-Cola Amatil by 75 cents per share,reflecting a jump in the company's market value since an initialoffer last year.

Coca-Cola European Partners (CCEP) said on Monday it wasraising the offer by 6% to A$13.5 per share, valuing theAustralian company at A$9.93 billion ($7.70 billion).

Shares in Coca-Cola Amatil, which have been gaining steadilysince CCEP's initial offer was made public in October, hit aneight-year high of A$13.41 in response.

Coca-Cola has long outsourced its bottling operationsto separate regional operators. It owns 31% of Amatil and 19% ofCCEP, which is now by far the largest by revenue, serving 13countries in Western Europe.

While the deal would unite two companies that bottle anddistribute Coca-Cola drinks, providing scale, operatingefficiencies and a larger geographic spread, it also providesCCEP with a platform for further consolidation in Asia.

Amatil said it backs the offer, which would be Australia'sbiggest deal this year and comes after reports https://www.afr.com/companies/manufacturing/coca-cola-amatil-takeover-delayed-as-investors-call-for-higher-bid-20210125-p56wqpthat its major shareholders viewed the earlier offer of A$12.75per share as too low.

The company's preliminary full-year results in Januaryforecast 2020 earnings before interest and taxes of A$550.7million, 10% ahead of expectations, while also slashing debt, onthe back of a strong Christmas in Australia and New Zealand.

Monday's offer is subject to an independent expertconcluding that the offer is "fair and reasonable", butJefferies analysts said CCEP was likely to seal the deal.

"We do not see a superior proposal emerging given theintegrated nature of the franchise system," the brokerage'sanalyst Edward Mundy said.

CCEP said it would buy out 10.8% of Coca-Cola's stake inAmatil in cash, but has not yet made any decision on acquiringthe rest.

($1 = 1.2890 Australian dollars)(Reporting by Siddharth Cavale and Nikhil Kurian Nainan inBengaluru; Editing by Daniel Wallis, Diane Craft and SherryJacob-Phillips)