AUS/CHINA: Yarraman Winery to merge with Asia Distribution Solutions
Yarraman Winery has confirmed that it will merge with China-based wine and spirits distributor Asia Distribution Solutions (ADS).
The Australia-based wine company said late last week that the purchase of ADS has been accepted by over 90% of the Chinese firm's shareholders, and will complete before the end of this month. The move will see Yarraman change its name to Global Beverages Asia.
Last September, Yarraman launched a tender offer to acquire ADS in exchange for 63.3m new shares valued at CNY648.7m (US$95m) in a reverse takeover transaction.
"Global Beverages is building a national retail and distribution footprint in China by continuing its consolidation of highly-accretive acquisitions at low multiples in a fragmented Chinese beverage distribution market," the company said. It has subsequently opened the first of several planned 'Big Box' retail superstore concepts in Wenzhou, in the Chinese province of Zhejiang, for beers, wines and spirits.
In connection with the merger, the group said it will acquire a 458-acre vineyard in Jugiong in Australia, "to provide wine-making capacity which will supply wine at all levels for the Chinese market".
Steve Wong, formerly the head of Pepsi-China, will become Global Beverage's CEO. "China is the world's largest and fastest growing beverage market and the largest global beer consuming market - estimated to be US$36bn with 8% annual growth," said Wong. "In addition, China's wine consumption is estimated to be approximately $4.8bn and growing at 6.5 times the global market."
Michael Kingshott, ADS's current chairman and the soon to-be appointed chairman of Global Beverages, added: "The completion of the merger with Yarraman and the listing of our stock in the US public market represent the completion of several steps that we have taken to financially position the company for future growth. The considerable expertise that the combined boards are putting in place in Global Beverages will allow us to capitalise on the vast Chinese market.
"The board of ADS recognised that, for the company's continued growth in China ... it would need to complement its business and broaden its resources. Yarraman's excellent reputation and capacity as a high-grade wine production company provides a perfect complement. The additional expertise that we now have assembled will allow the company to extend its distribution operations into the Big Box retail market, thus benefiting both from the HORECA trade and direct retailing of its wide range of beverage products."
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