UPDATE: Blackstone, Lion Sell Orangina; Get EUR2.6 Billion - Source

Buyout firms Blackstone Group (BX) and Lion Capital said Tuesday they had a received a binding offer for Orangina Schweppes Group from Japanese drinks giant Suntory Holdings Ltd.

Financial details of the transaction weren't disclosed but a person close to the deal told Dow Jones Newswires that the price tag is EUR2.6 billion, netting the duo twice the money they invested.

The deal, which is subject to antitrust clearance, is due to complete Oct. 31.

Headquartered in Paris, Orangina is the number two player in the European still soft drinks market after Coca Cola Co. (KO) and the number three player in the European carbonated soft drinks market. In addition to its orange drink, Orangina's portfolio also includes national brands such as La Casera in Spain and Rosinka in Ukraine, and niche brands such as Gini and Canada Dry.

Blackstone and Lion Capital, both of whom have made several investments in the consumer and brand sectors, bought Orangina in February 2006 for $2.24 billion, or EUR1.85 billion at the time. They financed the deal with EUR600 million equity and the balance in debt.

Suntory Holdings, which bottles and distributes PepsiCo Inc. products in Japan and makes well-known whisky brands such as "Yamazaki," wants to gain traction in the global market and diversify its portfolio.

Plans to merge with beer-maker Kirin Holdings Co. (2503.TO) were last week filed for review with Japan's antitrust regulator, the Fair Trade Commission.

Earlier this year Suntory paid more than EUR600 million (A$1.18 billion) for Groupe Danone SA's Australian and New Zealand drinks business Frucor.

Analysts didn't expect the sale to have much effect on the public markets, given that Orangina is a private company and Britvic PLC (BVICF.LN) is the only remaining listed soft drinks company following Cadbury PLC's (CBY) sale of its Schweppes carbonated drinks business last year. The U.S. unit is now called Dr Pepper Snapple Group Inc (DPS) and is listed on the New York Stock Exchange.

"The Orangina business has been flagged to go to a Japanese company for some time - apart from maybe stirring up a bit of excitement over M&A activity the market is unlikley to react to the deal," said Charles Stanley analyst Jeremy Batstone-Carr.

Rothschild, JPMorgan Chase (JPM), Citigroup (C), Blackstone Corporate Advisory, Royal Bank of Scotland PLC (RBS) and Nomura Holdings (NMR) acted as financial advisers to Lion Capital and Blackstone.

-By Marietta Cauchi, Dow Jones Newswires; [phone]; [e-mail]

(Hiroyuki Kachi in Tokyp contributed to this report.) Dow Jones Newswires; 813-6895-7562; [e-mail]