Tokyo/Wellington: Japan’s Asahi Group agreed to buy the mineral water and juice business of Australia’s P&N Beverages for A$188 million ($203 million) and made an offer for New Zealand drinks maker Charlie’s Group as Asahi steps up efforts to expand beyond its shrinking home market.
Asahi pared back its purchase of P&N after a bid to buy the entire company was blocked by Australia’s competition watchdog, but analysts said the parts it selected were a good fit for its business.
Asahi, which produces beer, soft drinks and packaged food, said under the revised deal it would first buy all of P&N and then sell back the carbonated beverage and concentrated juice business to Tru Blu Beverages, which is owned by the major shareholders of P&N.
Separately, Charlie’s Group said Asahi had submitted a recommended takeover bid, valuing the New Zealand fruit juice and soft drinks maker at NZ$129 million ($107 million).
The offer of NZ$0.44 a share is at a 57% premium to Charlie’s Friday close. Its shares rose 54% on Monday.
Asahi and its domestic rivals are moving to expand beyond the shrinking Japanese market.
Kirin Holdings has also snapped up assets in Australia such as Australia National Foods and Dairy Farmers and the country’s No. 2 beer maker, Lion Nathan.
“This move is in line with Asahi’s strategy to become a general food maker in the global market,” said Yoshiaki Yamaguchi, an analyst at SMBC Friend Research Center in Tokyo.
Asahi’s shares were up 0.7% at midday, compared with a 1.1% rise in Tokyo’s benchmark Nikkei average.
Asahi already has a presence in Australia after buying the Australian beverage business of Cadbury, Schweppes Australia for £550 million ($880 million) in April 2009.
Asahi first sought to buy closely held juice maker P&N from founder Peter Brooks for A$364 million in August last year. Brooks holds an 83% stake in P&N, according to Asahi.
In March this year, the Australian Competition and Consumer Commission blocked Asahi’s attempt to buy the whole of P&N, saying the takeover would remove P&N as the only strong competitor to Australia’s Coca-Cola Amatil and Asahi-owned Schweppes.
The transaction was revised so that Asahi would keep only P&N’s mineral water and juice business, including the brands Frantelle Spring Water, Extra Juicy and Pop Tops.
“I don’t see any major negative impact on Asahi from not being able to buy the rest of the company,” Yamaguchi said.
The transaction is expected to be completed in September after receiving approval from the Australian authorities, Asahi said.
The acquisition will have no significant impact on its earnings for the financial year ending in December, it added.
Asahi’s bid for New Zealand’s Charlie’s Group is also conditional on regulatory approval and a 90% acceptance from shareholders.
If the deal is successful, Charlie’s will be run as a standalone unit within Asahi’s Australia-based Schweppes business.
The company’s main brands are Charlie’s and Phoenix Organics, and it sells in New Zealand, Australia and parts of Asia and the Middle East.
Asahi was advised by Rothschild, while Charlie’s was advised by Macquarie Bank on the deal.