Danone’s Frucor attracting strong trade interest, Coca-Cola Amatil outbid

Posted by Daniel Palmer on 17th October 2008

Frucor, Groupe Danone’s Australian and New Zealand beverage business, has reportedly drawn the attention of a number of trade suitors as private equity firms drop out of the bidding.

Danone has not yet officially put Frucor on the market but they announced a thorough review was underway in August and, with their recent refocus on health and wellness products, speculation of a sale has been strong.

Frucor, New Zealand’s second largest non-alcoholic beverage manufacturer, is valued by analysts at around $1 billion. They own the popular Mizone, Evian and V brands and are the bottlers for Pepsi in New Zealand.

Bankers and analysts have told Reuters that, in spite of the economic downturn, a number of potential trade buyers are keen to purchase the drinks business, including Coca-Cola Amatil, National Foods – the Australian unit of Japanese-based Kirin Holdings and Asian soft drink bottlers Fraser & Neave. Reuters believes five parties submitted first round bids last month and second-round offers are reportedly due soon.

The Chief Executive of Coca-Cola Amatil (CCA), Terry Davis, told the Australian Financial Review that CCA had put in an indicative bid for Frucor, but had been informed two rivals had submitted higher bids. He added that the Coke bottler was still involved in the process but remained unwilling to raise their offer. The company also remains keen on the drinks arm of Cadbury Schweppes, if it is to be sold*.

*Cadbury Schweppes is still to complete a review of their Australian beverage operations.