UPDATE: US: Coca-Cola silent on CCA Korea stake claims
The Coca-Cola Co. has refused to comment on reports that it is to buy a stake in Coca-Cola Amatil's South Korean operations.
Citing a source familar with the situation today (25 July), Reuters reported that Coca-Cola will take a 10% stake in the impending sale of Coca-Cola Korea Bottling Corp., when LG Household & Health Care buys the unit from CCA in the coming weeks.
LG will retain the remaining 90%, the source added.
When contacted by just-drinks today, however, a spokesperson for Coca-Cola would not be drawn on the claims. "That would fall in the area of rumours and speculation," the spokesperson said. "We do not comment on speculation."
LG Household was confirmed as the preferred bidder for the Korean bottling unit by CCA earlier this month. LG came out on top in the race for CCA's Korean unit, beating a rival bid from SPC Group.
In February, CCA said 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 (US$423.5m). 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.
While CCA initially hoped to recoup in the region of US$619m from the sale, the two companies have said they are discussing a deal worth between $520m and $545m including the assumption of debt.
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