Thursday, August 2, 2012

The Coca-Cola Company (NYSE:KO) Interested In Exploring Offer for Fraser & Neave Beverage Division

According to Bloomberg, the world’s largest maker of soft drinks, The Coca-Cola Company(NYSE:KO) is planning on bidding for Singapore’s Fraser and Neave Ltd. the F & N business may ditch Coca Cola for Japan-based Kirin Holdings Co., a company that is also exploring to bid.

As per Euromonitor International Data, The Fraser and Neave operations would impart Coca Cola CEO, Muhtar Kent a massive share of the soft-drinks sales in Singapore and Malaysia. The whole unit that includes Fraser & Neave’s soft drinks and dairy products may account to as much as $3 billion, according to secret sources.

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As per Lim Jit Soon, an analyst based in Singapore, Nomura Holdings Inc., F & N has a monopoly in Malaysian market. They have a strong brand name in 100Plus that has recognition in the overall region.
Fraser & Neave also owns a real estate business with services apartments, industrial property and shopping centers. As per the data compiled by Bloomberg, real estate accounts for S$2.1 billion last year, which is 34% of the total. The data show had also mentioned that the soft drinks unit had revenue of S$759 while the dairy business sales accounted for S$1.1 billion in the year 2011.

Coca Cola seemingly has not made any decision yet. It is waiting to see what other suitors have to do.
Fraser & Neave have requested for a halt in trading of its stakes sa per the announcement made by Jennifer Yu, spokeswoman for F & N. she refused to comment on Coca Cola’s interest or reasons for the trading halt. A spokesman for Coca Cola, Kent Landers said that he can’t comment on market conjecture.

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Coca Cola and Kirin are not the only chains that are considering the option of bidding for F & N’s foods and drinks. Heineken, the world’s third largest brewer has offered S$7.5 billion to gain control over a brewer wing that it runs along with F & N. Fraser and Neave owns 40% of Asia Pacific Breweries Ltd. whereas Heineken owns 42%.

Shares of KO are down 1.62% to $79.70.

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