Athens, Aug. 6 - Coca-Cola Hellenic (CCH), the world's No.2 Coke drinks bottler, on Wednesday clinched a deal to buy family-owned Italian peer Socib SpA for 270 million euros ($418.5 million), expanding in its second largest market.
Analysts said the acquisition was a good strategic move that may help offset profit concerns after CCH and other soft drink bottlers cut forecasts on fears of a downturn in consumer spending, rising energy costs and high inflation.
"CCH has the cash to proceed with buyouts and it is positive that they are sticking to long-term growth plans despite the crisis in the beverage sector," said one Athens-based analyst.
The Greek bottler, 23.3 percent owned by Coca-Cola will buy Italy's second largest Coke bottler, adding 5 regions in southern Italy with a population of nearly 14 million.
In June, CCH cut 2008 guidance, citing rising costs and adverse conditions in some of its markets, a move which prompted a series of downgrades from brokerages and hitting its shares.
"Italy is CCH's second biggest market in terms of volume and has not reached maturity yet. The deal gives CCH opportunities to improve its profit margins in the medium term," he added.
Socib sells bottled Coke in the south of Italy, while the local unit of Coca-Cola Hellenic (CCH) operates in the north of the country. The acquisition will increase sales volume in Italy by approximately 25 percent, CCH said.
CCH said the buyout of Socib would not seriously impact its 2008 profit, as it will be finalised in the year's last quarter.
By 1310 GMT, CCH's shares were 1.6 percent down to 17.06 euros, underperforming Athens bourse's general index which gained 0.1 percent.
CCH trades at about 13 times its estimated 2008 earnings, on a par with Coca-Cola Enterprises, the world's No.1 Coke bottler, and at a discount to Australia's Coca-Cola Amatil which trades at 15 times.