Australia’s soft drinks bottler and producer Coca-Cola Amatil has launched a takeover bid for home and office water business Neverfail Springwater Ltd.
The move is a bid by CC-Amatil to build its presence in one of the most dynamic markets in soft drinks.
Talking to analysts at a media briefing Amatil CEO Terry Davis said while C-C Amatil has more than 60% of the Australian carbonated soft drinks market, it still had “some way to go to achieve that status” in the non-carbonated market, where its share stands at just 10%.
“Water is one of the largest and fastest growing beverages in Australia and is a major opportunity for the company,” Davis said.
“The acquisition of Neverfail, an Australian water business specialising in home and office delivery (HOD), would represent an important step in realising this goal as it will complement our existing packaged water business and double our annual water volume in Australia.
Davis said cost savings and synergies would exist with the acquisition because the company could extend the Neverfail brand into retail channels already used by C-C Amatil. C-C Amatil hopes to use Neverfail’s capacity to supplement its own water production capacity.
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Amatil launched a A$215m (US$133 million) to buy Neverfail Ltd by offering to pay A$2.25 for each Neverfail share, 22% more than yesterday’s closing price. The bid was launched after Amatil bought 15% of Neverfail yesterday.
However, the board of Neverfail Springwater Ltd, which is Australia’s largest home and office water supplier, has said that the bid appears inadequate.
The board has not yet met officially to consider the offer, but said that, “Neverfail’s initial reaction is, however, that CCA’s offer is inadequate and undervalues the company.”
