European partner of Coca-Cola makes USD 6.6 billion play

European partner of Coca-Cola makes USD 6.6 billion play

In an unprecedented approach, Coca-Cola’s European bottler has proposed to buy Australian peer Amatil Limited for $6.6 billion (A$9.28 billion). However, the price for the take over has been cut short following the uncertainty of the coronavirus pandemic. 

 

This would be the biggest acquisition of the year in Australia. But it may be priced below its overall valuation considering the performance before the pandemic. 

 

Interestingly, the support from Australia seems it might take years to stabilise the economy of the country. Coca Cola Amatil has seen a massive shutdown of its pubs and restaurants since March 2020, which has hit its profits hard. However, some local economists are suggesting that the economy might improve from here onwards. 

 

Notably, Coca Cola owns 19 per cent stake in the London based company and 31 per cent in the Australian one. The stock price of Coca Cola’s Amatil jumped to A$12.31, a 15 per cent hike in the early trades. Although it was below the proposed price of A$12.75. It raised the factor that investors think that the deal might not initiate. 

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