Berri buyout: Some of the Berri range of Australian fruit juice
Giant multinational beverage and food producer, San Miguel Corp of the Philippines, has taken a 50 per cent stake in Australian fruit juice icon, Berri, in a deal valuing the company at US$235m. San Miguel, which is 15 per cent owned by Japan’s Kirin Brewery, is the largest listed food, beverage and packaging company in south east Asia.
Australia’s biggest juice packager with an estimated 50 per cent of the domestic market, Berri is privately held, with former chairman Doug Shears holding a majority stake through ICM Australia Ltd and institutional investors, such as Deutsche Bank and AMP, owning the remainder.
It is understood that the institutions will sell their holdings and Shears will sell a six per cent stake, leaving him with 50 per cent.
According to Berri CEO, Alison Watkins, the San Miguel deal would give Berri "instant access" to Asian markets. She acknowledged that San Miguel, once known primarily for its beer, was aggressively expanding its business in non-alcoholic beverages across the Asia Pacific region.
Meanwhile, the San Miguel acquisition enables it to enter the Australian market where growth in juice and bottled water sales outstrips that of beer and soft drinks.
This continues a strategy followed by San Miguel chairman, Eduardo Cojuangco, who has been expanding overseas as domestic sales stall and turning to non-alcoholic drinks for earnings growth in a world of more health-conscious consumers.
The San Miguel label appears on nine out of every ten bottles of beer sold in the Philippines, but the company has been on a buying spree, diversifying away from brewing. Between 1999 and 2002 it spent US$1.2b on adding soft drink and meat processing businesses to its growing stable.
Founded in 1945 by fruit growers in South Australia, Berri had annual sales of about A$600 million, reporting pretax earnings of A$41 million in the 12 months ended June 30, 2003. In addition to the famous Berri brand, it also markets under the Just Juice, Daily Juice and Australian Fresh labels.
