Japan’s Suntory pays EUR 2.6 billion for Orangina Schweppes
Blackstone and Lion Capital, both of whom have made several investments in the consumer brand sectors, bought Orangina for EUR 1.85 billion in 2006. They financed the deal with EUR 600 million in equity and the balance in debt.
Headquartered in Paris, Orangina is the number two player in the European still soft drinks market after Coca-Cola, and the number three player in the European carbonated soft drinks market with a turnover of EUR 1 billion and a workforce of 2500.
The sellers argue that in the three years they owned Orangina Schweppes, the company has achieved “industry-leading growth, both organically in its core countries and by expansion into new markets, and through strategic acquisitions of leading brands. From 2006 to 2009, total group volumes and sales have expanded, supported by a re-launch of each of the core brands and stepped-up investment in trade and consumer marketing.”
But it’s a fact too that in these tough economic times, Blackstone and Lion Capital should call themselves glad they found a buyer at all to make their planned exit from Orangina possible. Actually, the price the Japanese are prepared to pay for Orangina isn’t much more than what the private equity companies originally paid – which can be blamed on the state of the economy or on the past performance of Orangina.
Orangina’s portfolio includes national brands such as La Casera in Spain and Rosinka in Ukraine, and niche brands such as Gini and Canada Dry.
Suntory Holdings, which bottle and distributes PepsiCo’s products in Japan and make well-known whisky brands such as "Yamazaki," want to gain traction in the global market and diversify their portfolio. Whether the slightly staid brand Orangina is the right kind of brand and the cut-throat European market the right kind of place for Japan’s Suntory to expand their business remains to be seen.
In September, Suntory filed plans to merge with beer-maker Kirin Holdings with Japan’s anti-trust regulator, the Fair Trade Commission (FTC). Kirin and Suntory have been in merger talks for some months but, as their combined share of Japan’s beer market would exceed 50 percent, they are concerned about whether the FTC will approve the deal.
If the FTC gives preliminary approval to the proposed merger, the talks may make progress.
Japan’s beer market has shrunk 15 percent in volume terms in the past decade as the nation’s population rapidly ages.
