Shareholders in bottler Coca-Cola Amatil overwhelmingly back takeover bid by Coca-Cola European Partners
Investors have voted to end 117 years of local corporate history, supporting a European giant’s swallowing of Coca-Cola Amatil.
Coca-Cola Amatil shareholders have voted strongly in favour of the $13.50 per share takeover by Coca-Cola European Partners, ending 117 years of Australian corporate history and throwing the spotlight on the European bottler which will become one of the biggest suppliers to the local market.
But CCA chief executive Alison Watkins doesn’t expect too much disruption once the $9.8bn takeover gains court approval, with the global bottler respecting cultural and corporate differences it will inherit in Australia as well as in New Zealand and Indonesia.
“I don’t think from a customer perspective it will feel very different at all, because we are essentially in each of our markets a local business, so in Australia we are a very Australian business, we manufacture in Australia, that will continue,” Ms Watkins said after shareholders voted more than 99 per cent in favour of the deal.
We will continue to employ Australians and the team will be led here locally to work with local customers in a way that meets the needs of those local customers. From Coca-Cola European Partners’ view they will be focused on making sure they support our existing teams.”
The Australian beverages giant, along with its businesses in New Zealand and Indonesia, will soon be swallowed up into the greater Coca-Cola European Partners multinational which will cement its position as the world’s biggest bottler of Coca-Cola by revenue.
Australia will be a small part of that global beverages operation, but Ms Watkins said the European bottlers operate in around 16 different markets and each of those are culturally different.
“It is really the nature of the Coca-Cola system I think that it really is able to combine the best of global brands and global capability, and bring that to bear in a way that works in the local context very effectively.
“They really get that.”
For leading supermarkets Woolworths and Coles, it gives them a new global supplier to deal with and a new relationship to navigate as Coca-Cola European Partners becomes gatekeeper to some of the most important brands on the shelf including Coca-Cola.
According to proxy votes revealed by Coca-Cola Amatil chairman Ilana Atlas on Friday at the shareholders meeting, 253.511 million shares were in support of the takeover bid, representing 62.48 per cent of shareholders and 97.61 per cent of shares voted. The vote easily passed the benchmark of at least 75 per cent of shares and more than 50 per cent of shareholders needed the takeover to proceed.
Later CC Amatil said total shares voted in favour of the deal were 99.03 per cent.
Coca-Cola Amatil’s largest shareholder, The Coca-Cola Company, based in Atlanta, USA, did not vote its 30 per cent stake in the bottler, with only independent shareholders voting on the takeover proposal.
The takeover is valued at $9.8 billion and once the deal is approved by the Supreme Court of New South Wales it will end 117 years of corporate history for Coca-Cola Amatil in Australia.
It hands Coca-Cola European Partners a bulging portfolio of beverage brands including the flagship Coca-Cola brand as well as leading brands in bottled water, coffee, cider, iced coffee and juices spread across operations in Australia, New Zealand and Indonesia.
Coca-Cola Amatil began life in 1904 as British Tobacco Company Limited and later expanded into packaging before a pivot into the Australian food and beverage industry in 1963, soon after the purchase of Coca-Cola Bottlers in Perth. Further acquisitions and bottling deals saw it become the lead Coca-Cola bottler in the country as well as buying the local bottling rights in New Zealand and Indonesia.
Now it will all be handed to European investors.
The takeover has moved remarkably quickly despite the size of the deal.
It was only in October that Coca-Cola European Partners launched its cash $12.75 per share takeover bid, which won over the support of the independent Coca-Cola Amatil board as well as chairman Ilana Atlas and chief executive Alison Watkins.
That bid valued Coca-Cola Amatil at $9.3bn.
The takeover manoeuvring was complicated by the fact that US parent, the Atlanta-based The Coca-Cola Company, was the biggest shareholder in Coca-Cola Amatil as well as a major shareholder in the acquirer, Coca-Cola European Partners.
There was some early resistance from other shareholders, and in February Coca-Cola Amatil shareholders, who had dug in over what they viewed as a low-ball takeover from Coca-Cola European Partners, secured an extra $379m after the European bottler upped its October takeover offer to $13.50 per share, to value the deal at $9.8bn.
Other than soft drinks, Coca-Cola Amatil owns the Grinders coffee business, bought more than 15 years ago, as well as a number of tea brands. In iced coffee it has the Barista Bros. brand, while there are the Mother and Monster energy drinks, and its juice brands include Goulburn Valley and Keri Juice. There are also key water brands led by Mount Franklin, Deep Spring and Neverfail. It also once owned fruit cannery SPC.
It has distribution deals across alcoholic beverages in whiskies, rums and bourbons including Canadian Club, Jim Beam and Suntory Whiskey. Coca-Cola Amatil has a joint venture beer business called Yenda and also sells locally a range of beers and ciders including Blue Moon, Coors and Rekorderlig.
Which of these brands and distribution deals new owner Coca-Cola European Partners will keep and which will be discarded will be the next challenge for the European bottler as it assumes control.
The takeover will go to the Supreme Court of NSW for approval on April 20, with shares expected to cease trading on the ASX on April 21 and the deal implemented on May 10.
Online retailer Redbubble will take Coca-Cola Amatil’s place in the S&P/ASX 200.
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