Refresco Proposes Sale Of Factory To Facilitate Cott Merger
Netherlands-based drinks-bottler Refresco has proposed the sale of one of its factories in the UK, in order to curb competition concerns regarding its acquisition of Cott's bottling activities.
Earlier this month, the UK's Competition and Markets Authority (CMA) said that it saw potential competition issues in the juice category if the $1.25 billion deal were to proceed.
Both Refresco and Cott supply juice drinks using an aseptic production process that allows them to be sold preservative-free and without refrigeration, however, only one other competitor in the UK currently supplies third parties using this process.
In response, Refresco has now proposed the sale of Cott's aseptic PET facility in Nelson, Lancashire, to a purchaser approved by the CMA.
The CMA says that it has accepted this offer in principle, and it now has until 14 March to decide whether to accept Refresco's proposed move or refer the merger for an in-depth investigation.
Elsewhere, Refresco said that it expects to complete the acquisition of Cott's bottling activities on 30 January, but the two companies will continue to operate separately in the UK until all requirements are met.
"The acceptance of our remedy by the CMA is an important milestone on the path to completing this transformational acquisition of Cott's bottling activities," said Hans Roelofs, CEO of Refresco.
"We continue to fully cooperate with the CMA, and to search for a suitable buyer in order to deliver on the required remedies. We will now focus on the next steps to completion and look forward to creating the world's largest independent bottler, with leadership positions across Europe and North America," Roelofs added.
Refresco's potential acquisition of Cott was first announced in July, and the strategic deal was originally expected to be completed by the end of 2017.
Since then, Refresco has agreed to a €1.6 billion takeover by a consortium of PAI Partners and British Columbia Investment Management Corporation, which is also set to include Cott's bottling business.
In November, the Rotterdam-based company, which operates 29 manufacturing facilities in the US and Europe, posted revenue of €583 million in the third quarter of the year, despite challenging market conditions.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.