Coca-Cola Amatil has moved a step closer to closing the sale of its Korean bottling operations. The Australia-based company said today (20 August) that it has signed a deal to divest Coca-Cola Korea Bottling Company to LG Household & Health Care.

The sale, which will meet CCA's previous guidance of between A$520m (US$417.3m) and A$545m, is expected to close in October, subject to regulatory clearance.

The final price of the unit will be decided after an independent third party review of the unit's accounts for the year to the end of June, CCA said.

"The business is being purchased by a very strong local company," CCA's group MD Terry Davis said. "We certainly expect that LG H&H will be able to achieve what we were not always able to in the Korean domestic market, and they will be able to unlock the full potential of the business."

As reported last month, The Coca-Cola Co. is expected to acquire a 10% stake in the bottling unit, with LG holding the remaining 90%.

CCA initially said in February this year that it was considering selling its bottling business in the country after its operations there hit group earnings during 2006. Total operating profit last year at CCA fell by 5.5% to A$539.4m. Earnings were hit by a product recall in South Korea as well as high sugar, plastic and aluminium costs across the business. Surprisingly, earnings in South Korea rose in 2006, although the figures were boosted by a number of asset sales.