Business News
Acquisition of Australian Beverage Business from Cadbury
Wednesday 24. December 2008 - Asahi Breweries, Ltd. ("Asahi") is pleased to announce that it has reached a conditional agreement with Cadbury plc ("Cadbury"; Head Office: London, UK; CEO: Todd Stitzer) to acquire the Australian beverage business owned and operated by Cadbury ("Schweppes Australia").
1. Acquisition of Schweppes Australia
Asahi expects to acquire Schweppes Australia in the first half of fiscal year 2009, ending December, following which Schweppes Australia will become a wholly owned subsidiary of Asahi.
The agreement with Cadbury is subject to normal regulatory and other closing conditions, including Foreign Investment Review Board approval. In addition, the agreement is subject to a right of negotiation granted to The Coca-Cola Company (“TCCC”) in 1999. Under this provision, TCCC has the right until March 2009 to negotiate with Cadbury regarding a potential acquisition of the Schweppes Australia. If Cadbury and TCCC do not enter into an agreement with respect to Schweppes Australia, then Asahi will enter into a binding sale and purchase agreement with Cadbury. Asahi expects that all other pre-conditions to closing will have been completed by 30 April 2009.
The total purchase price for this transaction is expected to be 1,185 million Australian dollars (approximately 73.5 billion Japanese Yen)* subject to certain price adjustments based on cash and cash deposits and interest-bearing liabilities and others.
* AUD1 = JPY62
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2. Reasons for the acquisition of Schweppes Australia
Asahi aims to satisfy its customers with the highest levels of quality and integrity, while contributing to the promotion of healthy living and enrichment of society worldwide. Its goal is to become a leading company with high growth potential by continuously offering lifelong enjoyment and excitement to customers, especially in Asia, in the business domain of food and health. Achievement of this goal requires that we investigate promising new markets and establish a new growth path for the Asahis group of companies (the “Group”), including aggressive business investments that provide synergies with our existing activities.
The soft drinks business is one of the key pillars of the Group. The Group is seeking further growth for its soft drinks business by expanding beyond its domestic market where Asahi Soft Drinks Co., Ltd. plays the key role for its growth. In Asia, we are reinforcing the Groups support toward Tingyi-Asahi-Itochu Beverages in China to accelerate its growth and toward Haitai Beverage in South Korea to strengthen its management foundation. In addition, we have been constantly pursuing investment opportunities to enter into the promising new markets in the soft drinks sector worldwide.
The acquisition of Schweppes Australia will strengthen our international soft drinks business, create a new platform for growth in Oceania and enable us to capture synergies across the Group.
3. Funding the acquisition of Schweppes Australia
Asahi will fund this transaction from cash on hand and new bank borrowings.
4. Impact on Asahis financial performance
Since the transaction is scheduled to complete in the first half of 2009, it has no impact on Asahis results for the current fiscal year ending December, 2008 on either a consolidated or non-consolidated basis.