Coca-Cola Amatil Limited ( ASX: CCL) has announced a decision not to acquire the Foster’s Australian spirit and spirit ready-to-drink (RTD) business.

As part of the agreement to sell its interest in Pacific Beverages to SABMiller, CCA had the right to acquire each of three Foster’s businesses including the Foster’s Australian spirit and spirit RTD business, the Australian non-alcoholic beverages business and the Fiji Breweries and distillery in Fiji and Samoa.

Foster’s spirit and spirit ready-to-drink (RTD) businesses include the Cascade brand of soft drinks, Cougar and Black Douglas spirit brands, as well as Foster’s Fiji brewery and distillery.

In a media statement, CCA’s Group Managing Director, Terry Davis said, “A key consideration in the due diligence process has been weighing up the relative brand health and value of the existing Foster’s brands versus developing our Australian spirits and ARTD brand portfolio organically by leveraging the portfolio of global Beam brands.

With a strong pipeline of new Beam products to be launched into the market over the next 12-18 months, CCA has elected not to pursue the acquisition.” At CCA’s full year result on 22 February, CCA had indicated that an outlay of up to AU$200 million could be made to purchase all three businesses.

As a consequence of CCA’s election not to proceed with the acquisition of the Australian spirit and spirit RTD business, it is estimated that the aggregate net outlay for the other two Foster’s businesses would likely be in a range of AU$50-70 million, assuming CCA elects to proceed with the acquisition of both of these businesses.

Due diligence is underway with any decision to acquire either of these businesses expected to be made shortly.

Under the terms of CCA’s Pacific Beverage sale agreement with SABMiller, having made the decision not to proceed with the purchase of the Australian spirit and spirit RTD business, CCA expects to receive a payment of approximately AU$34 million from SABMiller. CCA said will use these funds to support its own alcohol growth plan.

- Australian Food News