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DB Breweries owner Singapore-listed Asia-Pacific Breweries has applied to New Zealand authorities for permission to look at acquiring privately held New Zealand alcoholic drinks maker Independent Liquor, the company said.
Asia-Pacific, controlled by Dutch brewing giant Heineken, said in a statement late yesterday that the move by its wholly owned subsidiary, DB Breweries, is preliminary and may or may not lead to an acquisition.
Separately, the Australian Financial Review newspaper reported today that Asia-Pacific's DB would tie-up with British drinks giant Diageo Plc in a bid for Independent.
Under the proposal, Diageo would take the Australian assets of Independent and DB would control the New Zealand assets, the paper said, citing no sources.
A price tag of up to A$1.1 billion ($1.3 Billion) has been put on Independent Liquor by some analysts.
Australasian brewer Lion Nathan has been cleared by New Zealand authorities to make a bid, but has not made a decision.
Media reports have said Foster's Group, Coca-Cola Amatil, and private equity investors Pacific Equity Partners and Nikko Principal Investments have also been shortlisted. Independent was put up for sale after founder Michael Erceg was killed in a helicopter crash last November.
DB has already entered the ready-to-drink (RTD) liquor market and its chief executive Brian Blake said earlier this year the company would not be entering the bidding war.
He saw downsides in buying Independent and queried whether the company would work as successfully without the "marketing genius" of its founder.
Mr Blake said the prices being talked about for Independent would be justified if annual profits of around $150m and growth could be maintained, but he doubted that.
"I'm not confident we could have."
He said Independent operated a totally different culture, where instead of investing heavily in brands, it gave distributors good margins and customers a cheap product.
However, Mr Blake noted Independent appeared to have maintained its momentum since Mr Ercerg's death.
DB's has branded its bourbon and cola RTD Barrel 51. Its 5 per cent alcohol by volume is much lower than many of Independent's products. It is also has a "drier" taste, possibly aiming for an older age group than sweeter products.
Mr Blake has also questioned whether companies that sold 12 per cent alcohol alcopops were undermining the concept of encouraging socially responsible drinking.
He said he didn't know of any research that had been conducted on the effects of such potent drinks, but suspected it might produce some "startling" results.
- REUTERS
