Coca-Cola Amatil announces merger worth $9.3 billion

This morning Australia’s Coca-Cola Amatil announced it is in discussions with European bottler, Coca-Cola European Partners (CCEP) on a proposed merger worth $9.3 billion. The business went into a trading halt on Friday.

Under the agreement Amatil shareholders would receive $12.75 cash per share, which equates to a 23 per cent premium to the one week volume weighted average price of its shares. The deal to buy the Amatil shares would be via a scheme of arrangement.

Coca-Cola Amatil's independent directors intend to unanimously recommend the proposed scheme of arrangement, subject to a range of conditions. The board of directors has rejected a number of proposals made by CCEP over the past two years.

To acquire Amatil in full, the European arm would also have to acquire the 30.8 per cent stake in Amatil currently held by the international drinks giant The Coca-Cola Company (TCCC), based in Atlanta.

Amatil released a letter dated October 25 that indicates the US parent and the European arm of Coca-Cola entered into a "co-operation letter" in respect of the proposed deal, suggesting that The Coca-Cola Company also supports the deal.