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Asahi Group to Purchase Charlie’s, P&N Water, Juice Units

Asahi Group Holdings Ltd., Japan’s biggest beermaker by sales volume, agreed to buy water and juice businesses in Australia and New Zealand for $309 million to expand overseas as sales decline at home.

Asahi plans to complete the A$188 million ($202 million) purchase of P&N Beverages Australia Pty Ltd.’s water and juice divisions in September, it said in a statement today. The Tokyo- based company also agreed to pay NZ$129 million ($107 million) for Charlie’s Group Ltd. (CHA), a New Zealand-based fruit juice producer, Asahi said in a separate statement.

P&N’s mineral water and Charlie’s premium drinks will complement products offered by Asahi’s Schweppes brand in Australia, said Takayuki Tanaka, spokesman for Asahi. The brewer, also in talks to buy PepsiCo Inc.’s bottler in Malaysia, is seeking growth overseas as Japan’s beer market has declined by 20 percent from its 1994 peak.

“They are acquiring abroad, as that’s where growth is,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo, which manages $28 billion. Asahi is “taking a chance,” that soft drink demand will continue to increase in New Zealand and Australia, he said.

$5 Billion for Acquisitions

Asahi, which said in February it may spend 400 billion yen ($5 billion) on acquisitions by 2012, rose 0.4 percent to 1,622 yen at the 3 p.m. close in Tokyo. The stock has gained 3.1 percent this year, compared with a 2.6 percent decline in the Nikkei 225 Stock Average.

The bid values Charlie’s at 44 New Zealand cents a share, a 57 percent premium to its closing price on July 1, the Auckland- based company said in a statement. The shares soared 54 percent to NZ$0.43 at 5 p.m. close in Wellington.

Charlie’s largest holders, including founders with about 52 percent of the company, agreed to accept the offer and the board is recommending shareholder consent. Asahi’s bid requires approvals under New Zealand foreign investment regulations.

The beverage maker’s brands, including Juicy Lucy and Phoenix Organics, will benefit from Asahi’s resources, Stefan Leponika, chief executive officer and co-founder, said in a statement.

Competition Concerns

The offer price is 1.5 times the company’s forecast earnings before interest, tax, depreciation and amortization for the year ending June 30, 2012, the company said.

P&N will sell its carbonated soft drinks and cordial businesses to Tru Blu Beverages Pty Ltd., according to the Asahi statement.

Photographer: Ian Waldie/Bloomberg

Bottles of Extra Juicy fruit cordial, produced by P&N Beverages Australia Ltd., sit on a shelf in a supermarket in Sydney, Australia. Close

Bottles of Extra Juicy fruit cordial, produced by P&N Beverages Australia Ltd., sit on... Read More

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Photographer: Ian Waldie/Bloomberg

Bottles of Extra Juicy fruit cordial, produced by P&N Beverages Australia Ltd., sit on a shelf in a supermarket in Sydney, Australia.

The Japanese brewer had offered A$364 million for closely held P&N in August to add labels including Frantelle Spring Water to the Pepsi and Schweppes brands it bottles in Australia. The Australian Competition and Consumer Commission raised concerns in March that the deal would diminish competition and increase the Japanese company’s ability to raise prices.

Asahi is offering about $200 million for Permanis, PepsiCo’s Malaysia bottler, competing with another company for the acquisition from Kuala Lumpur-based C.I. Holdings, a person with knowledge of the matter said. The person declined to be identified as discussions are private. A deal may be concluded within four to six weeks, the person said.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editors responsible for this story: Dave McCombs at dmccombs@bloomberg.net; Malcolm Scott at mscott23@bloomberg.net

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