JAPAN: Asahi Breweries readies Cadbury's Australia buy
The Japanese company said yesterday (24 December) that it expects to acquire Schweppes Australia in the first half of 2009, subject to regulatory and other closing conditions, at a cost of JPY73.5bn (US$809.2m).
Cadbury, which spun off its US soft drinks business in May this year, confirmed earlier this month that it was putting its Australian soft drinks business up for sale following a strategic review.
"The soft drinks business is one of the key pillars of the (Asahi) group," the Japanese company said. "The group is seeking further growth for its soft drinks business by expanding beyond its domestic market where Asahi Soft Drinks Co. plays the key role for its growth.
"The acquisition of Schweppes Australia will strengthen our international soft drinks business, create a new platform for growth in Oceania and enable us to capture synergies across the group."
Asahi noted, however, that its purchase is subject to a right of negotiation granted to The Coca-Cola Co. in 1999. Coca-Cola has the right to negotiate with Cadbury regarding a potential acquisition of Schweppes Australia until March. "If Cadbury and Coca-Cola Co. do not enter into an agreement ..., then Asahi will enter into a binding sale and purchase agreement with Cadbury," the company said. All other pre-conditions to closing are expected to have been completed by the end of April.
Schweppes Australia is the second largest player in the Australian soft drinks market, whose owned brands include Schweppes, Cottee's, Solo and Spring Valley. Franchised brands include Pepsi, Sunkist and Gatorade. The business had gross assets of AUD636m (US$434.3m) as at the end of December last year.
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