NEW ZEALAND: Coke and Amatil acquire Rio Beverages
Australasian soft drink bottler Coca-Cola Amatil Limited (CCA) and the Coca-Cola Company are to jointly acquire Rio Beverages Limited in New Zealand for approximately NZ$40 million (approximately A$35m).
Under the agreement Coca-Cola will will acquire the trademarks and intellectual property associated with the brands and business, which will be authorised for use to Coca-Cola Amatil(NZ) Limited (CCANZ). These brands include Rio Gold and Keri fruit juices, a market leading lifestyle beverage, Thextons fruit juice drink, Ikon energy drink and Kiwi Blue mineral water.
CCANZ will acquire the remaining business assets of the Rio Beverages business including two bottling facilities in Auckland and Christchurch, cold drink equipment and distribution assets.
"The acquisition of Rio Beverages is consistent with CCA's and TCCC's desire to provide a broader beverage product offering in New Zealand, particularly in the juice, lifestyle beverage, fruit drink, sports and water segments. It will also enable the New Zealand Coca-Cola system to strengthen its ability to connect with consumers and partner with customers with a broader portfolio of non-alcoholic ready-to-drink beverages," the companies said in a stock exchange statement.
Arthur Van Benthem of The Coca-Cola Company said the transaction created an opportunity for the Rio brands to be developed to their full potential. "Each of the brands has its unique position in the New Zealand market and we will be using our marketing expertise to further refine and develop them."
CCA's General Manager of New Zealand, David Westall, said "The acquisition reflects the confidence the Coca-Cola System has in the New Zealand market as the transaction will provide CCANZ with significant additional local manufacturing capability for new non-carbonated beverages.
"We currently expect to continue to manufacture at Rio Beverages' two bottling facilities and achieve cost synergies over time with our existing business," he added.
The acquisition cost represents a multiple of between 7 and 8 times forecast earnings before interest and tax for the current year ended 31 December 2002. The transaction will be immediately earnings per share positive for both CCA and TCCC, the companies said.
The acquisition will be subject to the New Zealand Commerce Commission review.
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