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Asahi to buy Independent Liquor for $1.5B

Asahi to buy Independent Liquor for $1.5B, extend grip on drinks market

Aug. 18 (BusinessDesk)– Japanese brewer Asahi Group agreed to buy Independent Liquor Group for $1.5 billion, gaining New Zealand’s largest and Australia’s third-largest pre-mixed liquor company and extending its grip on the drinks market downunder.

Asahi will buy Independent Liquor, the trading name of Flavoured Beverages Group Holdings, from shareholders including buyout firms Pacific Equity Partners, Unitas Capital and the widow of company founder Michael Erceg.

The acquisition is the biggest overseas purchase yet for Asahi, which last week succeeded in its $129 million takeover of juice company Charlie’s Group.

Last week it gained antitrust approval to buy the juice and mineral water business of Australia’s P&N Beverages for about US$200 million and last month agreed to acquire Malaysia’s PepsiCo bottler Permanis Sdn for US$274 million.

It acquired the Schweppes Australia soft drinks business in 2009.
Asahi aims to “join the ranks of the top global food companies in scale” by 2015, according to a statement. It wants to increase overseas sales to between 20% and 30% of its total revenue.

Flavoured Beverages had net assets of $498 million as at September 2010 and reported operating earnings of $83 million, up from $50 million a year earlier. The acquisition won’t materially lift Asahi’s calendar 2011 results, it said.

The Wall Street Journal last month reported that Asahi is making use of a US$4.9 billion war chest to make acquisitions overseas as it builds scale. At home in Japan, the weak economy and aging population is capping growth in the food and beverages sector, the WSJ said.

Pacific Equity and Unitas each held 43.9% of Flavoured Beverages.

Shares of Asahi rose 0.8% to 1600 yen on the Tokyo Stock Exchange today and have declined 1% in the past 12 months.


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