By ian Neubauer
Danone has signed an agreement with Suntory of Japan for the sale of Frucor, its subsidiary Australian and New Zealand beverage unit, for $1.08 billion.
Frucor is the maker of V, market leader of Australia’s lucrative energy drink sector, with 54 per cent market share. Frucor also sells a range of sports drinks and fruit juices and holds the Pepsi bottling license in New Zealand.
Frucor was acquired by Danone in 2002 for NZ$294 million— almost five times the price it sold the company for yesterday (October 23). Danone said the sale stemmed from its refocus on mineral water and mineral-water based beverages but revealingly added it would use proceeds from the sale to repay debt.
A number of multinationals have entered a cycle of divestment because of the world financial crisis, while others are implementing more conservative investment strategies in the face of higher credit costs.
But Suntory spokesperson Shunji Ueda told TheShout today (October 24) he is confident the higher-than-expected acquisition price would bear fruit. It came about following a protracted bidding process that included Coca-Cola Amatil, Kirin Holdings and Asahi, among others.
“[We would not have bought it] without confidence to some extent,” Ueda said, adding that it was undecided at this point if Suntory would sell V and the other successful Frucor brands in Asia and Japan.
Founded in 1899, Suntory is the leading producer and distributor of alcohol- and non-alcohol-based beverages in Japan.
It has an extensive portflio that inclues spirits, beer, health foods and soft drinks, with an annual turnover of $US15 billion.