Coca-Cola European Partners (CCEP) has agreed to buy Australian peer Coca-Cola Amatil for AUD 9.28 billion ($6.62 billion approx.).
The Australian bottler is backing the takeover proposal – which Reuters says prices the firm below its market valuation in February – due to uncertainty sparked by the coronavirus crisis.
Uniting two companies that bottle and distribute Coca-Cola drinks, the deal would provide scale and a larger geographic spread. According to CCEP, the proposed transaction would almost double its consumer reach.
Coca-Cola Amatil has been hit by the impact of coronavirus-related restaurant and pub shutdowns, and chief executive Alison Watkins said on an investor call, cited by Reuters, that the business faces the risk of further disruption.
“We are really confident about the recovery that the business is making [but] clearly there’s uncertainty over the next couple of years with the economic situation, and just the risk of further health outbreaks that could disrupt the business,” said Watkins, when asked about the value of CCEP’s bid.
CCEP has offered AUD 12.75 a share ($9.09 approx.) for the 69.2% of the bottler not owned by The Coca-Cola Company. Coca-Cola Amatil shareholders have branded this as opportunistic and too low, according to The Australian Financial Review.
The world’s largest Coke bottler by revenue, CCEP serves a consumer population of over 300 million across Western Europe. The company was formed by the 2016 merger of three European bottlers.