Australian-based soft drinks group Coca-Cola Amatil (CCA) has announced that it has selected LG Household and Health Care as the preferred bidder for its South Korean business Coca-Cola Korea Bottling Corp.

The company said it had entered into exclusive negotiations with LG Household and Health Care regarding the sale of the business which is expected to fetch between US$520m and $545m including the assumption of debt.

The two companies have entered into a non-binding Memorandum of Understanding. The final terms of the sale are currently being negotiated. If the sale goes through, CCA is expecting to record a loss on book value of between $25m and $50m.

CCA said both parties were looking to move quickly towards finalising  the transaction, and expects the deal to be completed within the next three months, subject to regulatory and other approvals.

CCA confirmed in February that it was considering selling its operations in the country where a product recall last year hit earnings. The company subsequently enlisted investment bank Goldman Sachs JBWere to help in assessing its options for the business.

Later LG Household and Health Care and SPC Group both confirmed that they were interested in acquiring the company.