Christmas looks bright for Coca-Cola Amatil

Christmas looks bright for Coca-Cola Amatil as shares rise on back of proposed merger announcement and Covid restrictions ease.

Coca Cola Amatil shares rose $1.60 to $12.35 on Monday following the announcement of a proposed merger with European bottler, Coca-Cola European Partners (CCEP) worth $9.3 billion.

CCA trading halted last Friday as the board of directors unanimously recommended the latest proposal, subject to a range of conditions, having rejected a number of offers from CCEP put forward these past two years.

Under the agreement Amatil shareholders would receive $12.75 cash per share. The deal to buy the Amatil shares would be via a scheme of arrangement.

Speaking of its Q3 results, Coca-Cola Amatil said that the Christmas period looks strong for the business as restrictions ease.

Volumes were down 5.4 per cent in the September quarter, an improvement on the 11.6 per cent decline experienced in the first-half of the year and a significant improvement on the April decline of 33 per cent.

Group Managing Director, Alison Watkins said: "We are encouraged by the recovery indicators that have emerged since July including the strong performances in Western Australia and New Zealand and the recent recovery in our on the go channels," Ms Watkins said.

"We anticipate these trends will be replicated across our major markets as Covid restrictions ease. As a result, we are well placed to capitalise on the all-important December quarter Christmas trading period."

Spirit consumption was up by 23.1% driven by the Jim Beam trademark and consumers drinking at home socialising. Beer and cider were up by 2.8% with a notably strong performance from Western Australia’s Feral Brewing Co which celebrated its 18^th year of trading last week. On the whole, alcohol and coffee trading revenue was up 5.7%.

Coca-Cola Amatil said that the challenge for the business will be for Supply Chain to keep pace to deliver to demand, especially in regional locations.