Glenboden M & A Originations

Orangina ripens as divestment candidate by expanding into new geography with Rosinka acquisition

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Origination Status company acquisition reported in press, June 2007;
Asset Rosinka, soft drinks producer in Ukraine focused on Kiev market;
Buyer Orangina Schweppes (France), no.3 branded soft drinks producer in Europe;
Seller private owners of Rosinka;
Buyer Rationale expansion into new European markets, create broader platform for exit purposes;
Seller Rationale attractive valuation, access to international brands;
NBs Orangina was acquired by Blackstone and Lion Capital, from Cadbury Schweppes, in 2006.
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This deal underlines how hot an M&A category soft beverages have become. While Coca-Cola and Pepsico are making a string of branded deals in the US and Europe, and while Refresco is busy eating up all the spare capacity in Europe for its private label and co-packing play, Orangina is also on the acquisition trail, in fast-growing developing markets in Europe. Yet the fact that it’s owned by private equity confirms that this strategy serves only to make it more attractive as an acquisition candidate, especially for Pepsico after that group’s contemporaneous acquisition of Sandora in Ukraine.

Until now, Orangina has been 80% focused, in sales terms, in France, Spain and Italy; Ukraine is hardly an ‘adjacent’ market for them. The idea seems to be for Orangina to expand Rosinka’s business beyond Kiev, to the rest of Ukraine.

It will be interesting to see to what extent Orangina uses the company as a platform for its international brands. We suspect that the emphasis will rather be on the ‘local hero’ Rosinka brand, given precedents elsewhere in emerging Europe. The end-game is to irritate Pepsico so much that the group acquires Rosinka or, ideally, the whole of Orangina.

Only a few weeks earlier, Pepsico announced the acquisition of Sandora, Ukraine’s no.1 fruit juice producer. Expect to see several more soft drinks deals, on the fast-growing fringes of Europe, before the year is out.

Pepsico to buy more juice companies; Coca-Cola to enter the fray with some enhanced water deals; plus some surprises here and there from other players. Maybe Blackstone and Lion Capital will allow Orangina to take out its checque book again ?

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