Coca-Cola Europe Bottler in Talks for Record Australian Deal.

Coca-Cola Coca-Cola Amatil Ltd Europe Asia

Coca-Cola European Partners Plc, the world’s largest independent bottler of the storied soft drink, is in talks to acquire Coca-Cola Amatil Ltd. to expand in Asia Pacific, according to people familiar with the matter.

Negotiations between the European and Australian bottlers are advanced and could be announced within days, said the people, who asked not to be identified because the matter isn’t public. Details, including on the structure of the deal, are still being finalized and talks could yet fall apart, the people said.

Coca-Cola Amatil, based in North Sydney, has a market value of about A$7.8 billion ($5.6 billion). The company’s shares were halted on Oct. 23 pending an announcement on a “potential material transaction.” U.K.-based Coca-Cola European Partners has a market value of about $17.7 billion.

A deal between the two bottlers would be the largest involving an Australian company so far this year, according to data compiled by Bloomberg. A representative for Coca-Cola European Partners couldn’t be immediately reached, while Coca-Cola Amatil declined to comment.

The talks underscore how soft drink bottlers are under pressure to consolidate as the popularity of sugary drinks declines, as well as because of the disruptions caused by the coronavirus pandemic. Coca-Cola European Partners decided early this year to halt its buyback program and defer a dividend to preserve cash.

Coca-Cola European Partners is interested in a majority acquisition of Coca-Cola Amatil, though some of the people said it’s also previously discussed asset purchases.

Coca-Cola European Partners is the world’s largest Coca-Cola bottler by revenue, with 48 production sites in Germany, Spain, Great Britain and elsewhere, according to a fact sheet on its website.

Coca-Cola Amatil is a dominant player in the Asia Pacific region, with 32 production facilities in Australia, New Zealand, Fiji, Indonesia and Papua New Guinea, according to its website.

The company has been named as a potential bidder for Australian liquor assets being sold by Japan’s Asahi Group Holdings Ltd., which could require a capital raise, according to analysts at Citigroup Inc.

Coca-Cola European Partners was created from the three-way merger of Coca-Cola Enterprises Inc., Coca-Cola Iberian Partners and Germany’s Coca-Cola Erfrischungsgetranke AG agreed in 2015. The biggest shareholder is Cobega, an investment vehicle belonging to Spain’s Daurella family, followed by the American soda maker Coca-Cola Co., Bloomberg data show.

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