Coco-Cola HBC share price knocked after drinks giant snaps up vodka group for £172m
Coca-Cola HBC, the bottler of Coca-Cola products, has seen its share price knocked after it revealed plans to snap up a Finland-based Vodka group for $220m (£172m).
The soft-drink company’s latest move comes as it looks to expand its presence within the alcoholic drinks market, while already bottling popular Italian apéritif Aperol.
Today it revealed plans to acquire Brown-Forman Finland Oy, the owner of the vodka brand Finlandia from Brown-Forman Netherlands.
Coca-Cola HBC had already been distributing Finlandia for more than 17 years – but now it owns the brand – with the acquisition helping drive its portfolio in the alcoholic drinks sector.
“Ownership of the Finlandia brand will enhance Coca-Cola HBC’s premium spirits credentials, driving mixability opportunities with premium and super-premium Non-Alcoholic Ready-To-Drink (NARTD) products,” it said.
The London-listed company has performed well in recent months, with revenues up 24.4 per cent to £2.2bn in the first leg of this year – crediting price increases for the boost.
However, its share price fell 1.35 per cent following this morning’s announcement of the acquisition, however it has slightly recovered since.
“Shares in Coca-Cola HBC have gained around 18 per cent so far this year, outperforming the wider UK market,” Victoria Scholar, head of investment, interactive investor said.
“It has enjoyed a series of price target upgrades from the analyst community lately including from Morgan Stanley and Deutsche Bank. “
She added: “In May the bottler said it was expecting full-year profit to reach the top end of its guidance thanks to price increases and strong demand for soft drinks. This has helped Coca-Cola HBC to offset the pressures from energy and commodity price inflation.”
“It has been faring better than rival Fever-Tree which has struggled a jump in glass bottling costs and glass shortages in the UK. Over the past year, Coca-Cola HBC is up around 26 per cent versus Fever-Tree which is down around 10 per cent.”