- Coca-Cola HBC agrees to buy Finlandia for $220 million
- Leading vodka brand in Central and Eastern Europe
- Unique opportunity to accelerate on-premise business in more markets
Soft drinks bottler Coca-Cola HBC (CCH) said it has agreed to buy the owner of the Finlandia vodka brand from a Brown Foreman Corporation (BF.B:NASDAQ) subsidiary for $220 million subject to regulatory approvals.
Shares in the Coke, Fanta, Sprite and Schweppes seller fell 1.7% in early trading as investors questioned the logic of the deal but clawed back the losses to trade flat on the day. Over the last year the shares are up 28%.
WHY DID THE COMPANY BUY A SPIRITS BRAND
Finalandia is a leading vodka brand in Central and Eastern Europe with annual volumes of 2.7 million nine-litre cases of which, over 60% is being made within HBC’s existing geographic footprint.
In it’s native Finland the brand is bottled by Anora Group on a long-term production services agreement.
Around 3% of CCH’s sales are generated from the premium spirits category which the company claims help it strengthen customer relationships and better address ‘important adult consumption occasions through mix activation’.
The company already has a long-standing relationship with Brown- Foreman as a distributer of products such as Jack Daniels and El Jimador in Hungary.
WHAT DID THE COMPANY SAY?
CCH said the proposed transaction represents a ‘unique’ opportunity to enhance its journey to become the leading 24/7 beverage partner.
CEO Zoran Bogdanovic commented: ‘Having been associated with the distribution of Finlandia for 17 years in several markets, we are excited by this unique and regionally relevant opportunity that will support the acceleration of our on-premise business across more of our markets.
‘The proven complementarity of our premium spirits business with our strong NARTD (non-alcoholic ready-to-drink) portfolio enables us to offer solutions for a broad range of 24/7 consumption occasions, particularly socialising moments.
‘ATTRACTIVE INVESTMENT’
‘We view this as an attractive investment and a natural evolution of our role as one of Finlandia’s distribution partners, further attesting to the strength of our time-tested and wide-ranging partnership with Brown-Forman.’
In February the company, which is a strategic bottling partner of The Coca-Cola Company (KO:NYSE), said it expected to deliver 2023 organic sales growth above its target range of 5% to 6%.
READ MORE ABOUT COCA-COLA HBC
