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Coca-Cola Amatil Drops Plans to Buy Foster’s Spirits Business

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March 5 (Bloomberg) -- Coca-Cola Amatil Ltd., Australia’s biggest soft-drink maker, said it won’t buy the spirits unit of Foster’s Group Ltd. as it instead focuses on an existing liquor distribution agreement with Beam Inc.

The company is still mulling bids for Foster’s Australian soft-drink and Fiji liquor units it has the right to buy under an agreement with SABMiller Plc, Sydney-based Coca-Cola Amatil said in a statement today. The company had said it may spend as much as A$200 million ($215 million) on the three businesses.

Australia’s biggest Coke bottler gained exclusive rights to buy the assets when it sold its share of the Pacific Beverages beer venture to partner SABMiller so the London-based brewer could complete its A$10.5 billion purchase of Foster’s. Coca-Cola Amatil’s potential outlay for the soft-drink and Fiji units is A$50 million to A$70 million, it said.

Coca-Cola Amatil has “a strong pipeline of new Beam products to be launched into the market over the next 12 to 18 months,” Chief Executive Officer Terry Davis said in the statement.

The company will receive A$34 million from SABMiller after opting not to buy the spirits unit, it said.

The stock today fell 0.5 percent to A$11.88 at 10:29 a.m. in Sydney trading. The shares have gained 3.2 percent this year.

Coca-Cola Amatil, which last month posted a 54 percent gain in second-half profit, is studying the accounts of Foster’s soft-drink business and the Fiji alcohol units and will make a decision on any bid “shortly,” it said.

To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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