Exclusive: Coca-Cola, Ambev eye Brazil juice maker, sources say

Tue Nov 1, 2016 3:47pm EDT
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By Tatiana Bautzer

SAO PAULO (Reuters) - Coca-Cola Co (KO.N: Quote), Ambev SA (ABEV3.SA: Quote) and Britvic Plc (BVIC.L: Quote) have shown preliminary interest in buying a stake in Brazilian juice maker Natural One SA, as global beverage giants seek to grow their platform of healthy drink choices, according to two people familiar with the matter.

Natural One, based in the southeastern town of Jarinu and founded 10 years ago by Ricardo Ermirio de Moraes, a member of the family that owns Brazil's largest industrial conglomerate, has hired the investment banking unit of Banco ABC Brasil SA (ABCB4.SA: Quote) to oversee the process, said the people.

At least three investment firms, one of them teaming up with an unnamed Brazilian agribusiness tycoon, are also analyzing Natural One and may enter the process, said the people, who requested anonymity because the process remains private.

Ricardo Ermirio de Moraes, whose family owns orange juice producer Citrovita SA and who himself was a president of that company, has yet to decide whether to sell a minority stake or control of the company, the first person said, adding that he seeks a value of around $150 million for the entire company.

Coca-Cola, Britvic and Natural One did not initially comment. Ambev and ABC Brasil, the local unit of Arab Banking Corp., declined to comment.

The deal underscores the growing relevance of non-carbonated drinks in the portfolio of global beverage giants, which are struggling with a widespread sugar and additives backlash among more health-conscious consumers. Increased takeover activity in that segment is boosting the allure of natural food and beverage start-ups selling natural juice at a premium.

Consumer staples deals accounted for almost 4 percent of mergers and acquisitions announced globally this year, with transactions fetching prices equivalent to an average 16.6 times operational profit - only trailing real estate and healthcare deals around the world, according to Thomson Reuters deals intelligence data.

Geographically speaking, an acquisition of Natural One could help a buyer gain further access to Brazil, the world's fifth largest market for natural food products. Healthy soft drinks are expected to grow 10 percent in Brazil annually through 2020, twice as much the estimated expansion of the overall beverage market, according to consultancy Euromonitor International.   Continued...

The logo of U.S. beverage group Coca-Cola is seen at the entrance of a visitors center of Coca-Cola Schweiz GmbH in Bruettisellen, Switzerland October 11, 2016.  REUTERS/Arnd Wiegmann