Coca Cola Amatil takeover comes with a message: Coke is it

For the mooted $10bn acquisition of CC Amatil to happen it will need the blessing of the parent company in Atlanta. Picture: NCA NewsWire/Joel Carrett

It might be more than a coincidence that just as Coca-Cola Amatil is considering once again to stray from its core business of bottling and Coke by spending billions on a suite of beer and dairy brands, that in faraway Atlanta The Coca-Cola Company has decided to act and make its own moves.

It has long been the belief, with some evidence, that The Coca-Cola Company has tired of its bottlers spreading themselves too thin by venturing into other beverages and forgetting the real reasons they exist, namely to buy Coke syrup from Atlanta, bottle it and make money for the US brand owner.

This is a situation that especially applies to the local bottler CC Amatil, which under its former boss Terry Davis and successive boards, has bought businesses in bottled water, dairy, beer and coffee, and struck distribution licences for dark spirits, American beer and Japanese whiskey. And there was also a costly purchase of fruit cannery SPC that ended in tears and hundreds of millions of dollars in losses. Coke and SPC aren’t even sold in the same supermarket aisle.

With each of these acquisitions it saw CC Amatil stray from Coke, be less reliant on Atlanta and in some views take away the focus of management from doing the best for Coke.

Rumours in the past few weeks that CC Amatil under chief executive Alison Watkins could now be considering a bid for a selection of beer and cider brands owned by Asahi or the Lion Dairy & Drinks business — or possibly both — might have now pushed Atlanta to act.

If the $9.3bn acquisition of CC Amatil was to happen it needed Atlanta’s blessing - which it got.

The Coca-Cola Company is CC Amatil’s biggest shareholder with a one-third stake and it also has a 19 per cent stake in the suitor, Coca-Cola European Partners.

It must have been sounded out before the European bottler got serious on a bid.

However, if the deal gets done it will bring together a bottler with operations stretching from Germany to Papua New Guinea with no real sense of complementary assets other than factories that pour out the same soft drinks.

In Australia, it will have the largest non-alcoholic beverage maker, but it might then move to shed itself of the baggage CC Amatil brings to the marriage such as coffee, bottled water and the rest that have never really felt at home beside cans of Coke.