Coca-Cola Amatil Won't Buy Foster's Australian Spirits

Coca-Cola Amatil Ltd. (CCL.AU), the Asia-Pacific bottler of Coca-Cola Co.'s (KO) drinks, said Monday it has decided not to take up its right to buy the Australian spirits business of Foster's Group Ltd. but may still acquire the brewer's Australian non-alcoholic drinks business and Fiji Breweries for up to A$70 million.

CCA secured the right to buy the three businesses with the sale late last year of its 50% stake in Pacific Beverages to partner SABMiller PLC (SAB.JO), as part of the London-based brewing giant's acquisition of Foster's. In its full-year results on Feb. 22, the company said it could spend as much as A$200 million buying the businesses.

CCA has elected not to proceed with the acquisition of the spirit and ready-to-drink spirit operations in Australia following due diligence. As a result of this decision, CCA said it expects to receive about A$34 million from SABMiller, which will be used to support its plans to expand its own alcohol operations.

Due diligence is underway on the Australian non-alcoholic drinks business and the Fiji Breweries and distillery in Fiji and Samoa, it said, adding it expected to make a decision on whether to push ahead with an acquisition soon. It estimated the net outlay for the other two Foster's businesses would likely be A$50 million-A$70 million.

CCA, one of the world's five largest Coca-Cola bottlers, has operations in Australia, New Zealand, Fiji, Indonesia and Papua New Guinea that make and sell a range of soft drinks, water, juices and other drinks. It also distributes the spirits of Beam Inc. (BEAM), which include products such as Canadian Club and Makers Mark.

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]