Coca-Cola Amatil: Spurns Fosters, goes alone on alcopops

Coca-Cola Amatil Limited (ASX: CCL) today announced that it has decided not to buy Foster's Australian spirit and spirit RTD …

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published March 5, 2012 11:48 am AEDT

Coca-Cola Amatil Limited (ASX: CCL) today announced that it has decided not to buy Foster's Australian spirit and spirit RTD (ready-to-drink) business, and is instead progressing the development of the company's own Australian spirits and RTD brand portfolio.

As part of the agreement to sell its interest in Pacific Beverages to SABMiller plc (LON: SAB), CCA has the right to acquire each of three Foster's businesses including the Foster's Australian spirit and spirit RTD business, the Australian non-alcoholic beverages business and the Fiji Breweries and distillery in Fiji and Samoa.

CCA is currently conducting due diligence on the other two businesses (Australian non-alcoholic beverages and Fiji Breweries and distillery in Fiji and Samoa), and any decision to purchase either of these businesses is expected to be made shortly.

Savings
CCA indicated that it was prepared to pay up to $200m to purchase all three businesses. By deciding not to purchase the spirits and spirit RTD business from Foster's, CCA will receive $34m from SABMiller, as well as saving itself more than $100m.

Should CCA decide to proceed with the purchase of the other two businesses, it expects to outlay between $50-$70m.

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Motley Fool contributor Mike King doesn't own shares in any of the companies mentioned. The Motley Fool's purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Click here to be enlightened by The Motley Fool's disclosure policy.

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