Frucor had sales of Ç210 million in the most recent fiscal year, making it a leading player in the energy drinks market in Australasia and the second-largest non-alcoholic drinks company in New Zealand. It employs around 600 people across New Zealand and Australia. FrucorÆs product portfolio includes fruit juices, fruit drinks, energy drinks, waters and soft drinks. Its key brands include energy drink V, Mizone Rapid sports drink, h2go water and G-Force fruit drinks.
Frucor is headquartered in Auckland and its Australia head office is in Sydney. It is 100% owned by Groupe Danone, following an unsolicited takeover by the French firm in 2002.
Danone confirmed to shareholders in August that it was reviewing ôlong-term strategic options for Frucor to ensure ongoing value creation for all its stakeholdersö. Danone was advised by J.P. Morgan on the sale.
Danone has a presence across 120 countries and had sales of Ç12.7 billion in 2007. It is present in four main businesses: fresh dairy products, waters, baby nutrition and medical nutrition. Danone decided to sell Frucor to enhance its focus on natural mineral water and spring water-based beverages and its core businesses. Danone will use the money it realises to retire debt on its balance sheet.
Suntory is a more than 100-year-old company headquartered in Osaka. It is closely held. SuntoryÆs product portfolio spans alcoholic drinks (whisky, beer and wine), health foods and soft drinks. The combined turnover of all Suntory group companies is around $15 billion. The company has been significantly increasing its global presence through strategic alliances and acquisitions within the beverage industry in the US, Europe and Asia-Pacific.
On the Frucor acquisition, Suntory was advised by Morgan Stanley.
ôFrucor has played an instrumental role in DanoneÆs growth and innovation strategy over the past six years,ö says Emmanuel Faber, co-CEO of Danone, in a written statement. ôWe are convinced that this new step will allow Frucor to ensure its long-term development within the beverages market.ö
The transaction is subject to approval by the New Zealand authorities.
When Danone first announced the divestiture of Frucor, private equity firms like CCMP Capital Asia, Pacific Equity Partners and KKR were reported to be interest in the asset. However, none of the financial sponsors finally tabled a bid, probably due to the fact that leverage for private equity deals is very difficult to raise currently. Strategic buyers said to have looked at the asset include Coca-Cola Amatil and Japanese firms Kirin Holdings and Asahi.
The deal follows only weeks after Kirin agreed to acquire Dairy Farmers at a firm value of A$910 million ($566 million) to consolidate its position in Australia's dairy industry. Goldman Sachs JB Were ran an auction for Dairy Farmers, while Kirin was advised by Macquarie Capital Advisers.
A number of high-profile M&A deals in the region have been pulled recently, including: Chinese Huawei's sale of a stake in its handset unit; another attempt by Richard Li to sell a stake in PCCWÆs telecom assets; and Indian miner Sterlite's tabled offer for US Asarco. All of these deals fell prey in some form to the tighter credit environment. But Japanese buyers on a quest to expand in higher growth markets and deploy their healthy cash reserves are ensuring that investment banks are closing some deals even in the difficult market environment.
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