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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  Coca-Cola Amatil Limited    CCL   AU000000CCL2

COCA-COLA AMATIL LIMITED

(CCL)
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Coca Cola Amatil : Cola's European partner makes $6.6 billion play for Australia bottler

10/26/2020 | 04:22am EST
FILE PHOTO: Bottles of Coca-Cola are seen at a Carrefour Hypermarket store in Montreuil, near Paris

SYDNEY/BENGALURU (Reuters) - Coca-Cola Co's European bottler has made a A$9.28 billion ($6.6 billion) buyout approach to Australian peer Coca-Cola Amatil Ltd, a cut-price proposal that the target firm is backing due to uncertainty sparked by the coronavirus crisis.

The takeover by Coca-Cola European Partners PLC (CCEP) would be the biggest involving Australia this year, but prices the target company below its market valuation in February - before the COVID-19 pandemic began to rock global markets and plunged the world into recession.

The support from the Australians indicates expectations of an economic recovery that could take years, a bleaker view than that of some local economists who have pointed to improving economic indicators. Coca-Cola Amatil's profit has been hit by shutdowns of restaurants and pubs since March.

The deal would unite two companies that bottle and distribute Coca-Cola drinks, providing scale, operating efficiencies and a larger geographic spread.

"Ultimately, when franchises become available, aligned Coke bottlers need to act," said Jefferies analysts in a note, adding CCEP would be able to strengthen Amatil's operational capabilities. "Longer term, the deal offers a platform for further consolidation in Asia."

Amatil's shares closed up 16.3% at A$12.50, below the proposed offer price of A$12.75, indicating investors are factoring in the possibility a deal might not come to fruition.

CCEP shares rose 8.5% in morning trade in London.

The deal could lift CCEP's earnings by 18% after three years, Jefferies said.

"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 Coca-Cola Amatil Chief Executive Alison Watkins on an investor call on Monday, when asked about the price.

CCEP was formed by the 2016 merger of three European bottlers. It is now the largest bottler by revenue, operating in 13 countries including the United Kingdom, Germany and Spain.

A spokesman for The Coca-Cola Co, which owns 31% of the Australian company and 19% of London-listed CCEP, said in an email the deal would be "in the best interests of the shareowners of both companies and of the Coca-Cola system overall".

The Australian company said CCEP would conduct due diligence before making a binding offer. The deal would also need approval from Australia's Foreign Investment Review Board, which was granted increased powers this year to block overseas deals deemed to be a security or supply chain risk.

CCEP said the deal would almost double its consumer reach, "ultimately driving sustainable and faster growth, through geographic diversification and scale."

($1 = 1.4031 Australian dollars)

(Reporting by Byron Kaye in Sydney and Nikhil Kurian Nainan in Bengaluru; Additional reporting by Martinne Geller in London and Siddharth Cavale in Bengaluru; Editing by Peter Cooney, Christopher Cushing and Mark Potter)

By Byron Kaye and Nikhil Nainan


© Reuters 2020
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Financials
Sales 2020 4 741 M 3 484 M 3 484 M
Net income 2020 202 M 148 M 148 M
Net Debt 2020 1 335 M 981 M 981 M
P/E ratio 2020 41,9x
Yield 2020 2,17%
Capitalization 9 130 M 6 712 M 6 708 M
EV / Sales 2020 2,21x
EV / Sales 2021 2,05x
Nbr of Employees 12 000
Free-Float 68,6%
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Mean consensus HOLD
Number of Analysts 9
Average target price 12,39 AUD
Last Close Price 12,59 AUD
Spread / Highest target 1,27%
Spread / Average Target -1,56%
Spread / Lowest Target -13,7%
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Managers
NameTitle
Alison Mary Watkins Group Managing Director & Executive Director
Ilana Rachel Atlas Chairman
Greg Barnes Chief Financial Officer
Debbie Nova Chief Information Officer
Krishnakumar Thirumalai Non-Executive Director
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